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While The New Tax Leader’s Almanac provides a valuable overview of the 2025 state and local tax (SALT) compliance landscape, several recent federal developments from H.R. 1, P.L. 119-21, the law known as the One Big Beautiful Bill Act (OBBBA) have introduced noteworthy updates firms should consider when advising clients:

• QBI Deduction (Section 199A): Though originally set to expire after 2025, H.R. 1 makes this 20% deduction permanent and expands the phase-in thresholds by $50K (married filing jointly) and $25K (all others). However, the specified service trades or businesses (SSTB) limitation still applies, so service professionals remain subject to disallowance above income thresholds.
• PTET and SALT Deduction: Despite debate over entity-level SALT deduction limits for SSTBs, the final law preserves current pass-through entity tax (PTET) rules, allowing full deduction at the entity level in 36 states and 1 locality. Individual SALT deduction cap increased to $40k (from $10k) for 2025 and will be adjusted 1% from 2026–2029. This deduction will be subject to a phaseout for income greater than $500k, but not to be reduced below $10k. H.R. 1 states that the SALT limit returns to $10k in 2030.
• Excess Business Losses: Although this limitation of pass-through business losses was slated to sunset after 2025, H.R. 1 makes the provision permanent. Excess losses will continue to convert to NOLs, as under current law.

These changes add nuance to the tax planning landscape and may shift strategy, particularly for high-income owners of pass-throughs and firms supporting SSTB clients. Firms should continue to monitor tax policy as legislative dynamics evolve through 2026.

As state and local tax complexity continues to grow—with shifting policies, evolving nexus rules, and heightened audit scrutiny—indirect tax teams face mounting pressure to keep pace. Fortunately, you don’t have to go it alone. This 2025 SALT Compliance Compendium highlights key trends and challenges, while also exploring the growing ecosystem of human and tech-powered support available to help. From advisory services and audit support to automation solutions and managed services, discover the insights and resources that can strengthen your compliance strategy in the year ahead.