Multistate Tax Trends: Interstate Insights and Regional Perspectives

Midwest SALT Manual

Pdf Summary

This Midwest SALT manual summarizes 2025–2027 state tax updates for Illinois, Indiana, Iowa, Minnesota, Nebraska, North Dakota, and Wisconsin, with a focus on income, sales/use, nexus, credits, apportionment, and PTET rules.<br /><br />Illinois made major changes to indirect taxes and business incentives, including higher Chicago lease and other local taxes, new and expanded credits, a remote retailer amnesty program, and significant income tax changes such as adopting Finnigan combined reporting, changing sourcing for pass-through interest sales, narrowing addback exceptions, limiting GILTI dividends, decoupling from federal bonus depreciation, and making PTET permanent. It also eliminated the 200-transaction nexus threshold for remote sellers.<br /><br />Indiana updated federal-change reporting timelines, local income tax rules, conformity dates, depreciation and interest decoupling, and added temporary deductions for overtime, tips, and passenger vehicle loan interest. It also changed sales tax rounding rules, tightened rules for out-of-state vehicle purchases, expanded tax warrant and amnesty procedures, broadened trust tax personal liability, and refined electronic notice delivery through INTIME.<br /><br />Iowa’s highlights include a redesigned R&D credit program with industry limits, caps, application requirements, and CPA verification, plus major business and property tax reforms, new or expanded credits, GILTI clarification, a new HMO-related tax, and sales tax exemptions for certain ethanol fuel and nuclear facility purchases.<br /><br />Minnesota’s omnibus tax bill largely conforms to federal OBBBA provisions, especially bonus depreciation, Section 179, research expense rules, interest deduction changes, and excess business loss permanence, while preserving Minnesota-specific conformity, apportionment, combined reporting, and PTE rules.<br /><br />Nebraska reported no major income or sales tax rate changes, but highlighted new deficiency notice fees, incentive updates, continued market-based sourcing, and technical rules affecting SaaS, programming, and exempt forms.<br /><br />North Dakota emphasized property tax relief, rolling federal conformity, low income tax rates, destination-based sales tax sourcing, SaaS sourcing under cost-of-performance, and a wide range of refundable and nonrefundable credits.<br /><br />Wisconsin generally did not adopt OBBBA changes except for a few items, but added significant individual and business credits, a retirement income subtraction, expanded R&D and film incentives, new sales tax exemptions, and continued scrutiny of SaaS, nexus, and combined reporting.

Keywords

Illinois tax updates

Indiana tax reform

Iowa R&D credit

Minnesota federal conformity

Nebraska sales tax

North Dakota property tax

Wisconsin business credits

PTET rules

nexus standards

sales and use tax