As discussed in our last legislative post, Colorado was the first state to call a special session to address the effects of the One Big Beautiful Bill Act (“OBBBA”). Since then, many states have either passed legislation or issued guidance to address its conformity or nonconformity to H.R. 1, the OBBBA.
Delaware called a special session on October 31, 2025, to address a potential multi-year revenue loss from rolling conformity to federal tax cuts under the OBBBA. On November 19, 2025, Governor Matt Meyer signed H.B. 255 to decouple from certain corporate tax provisions in the OBBBA. Specifically, the bill decouples from the following: (1) expensing for domestic research and experimental expenditures made after December 31, 2021, but on or before December 31, 2024, to continue expensing in effect immediately before enactment of the OBBBA; (2) for property acquired and placed in service after January 19, 2024, and before January 1, 2031, to continue amortization and depreciation under the IRC in effect immediately before the enactment of the OBBBA; and (3) for qualified production property placed in service before January 1, 2031, to continue amortization and depreciation under the IRC in effect immediately before the enactment of the OBBBA.
During its fall veto session, the Illinois legislature passed S.B. 1911 to decouple from the OBBBA’s full immediate bonus depreciation for qualified property and expensing for qualified production property. In addition, S.B. 1911 will modify the Illinois statutory definition of Global Intangible Low-Taxed Income (GILTI) to Net Controlled Foreign Corporation Tested Income (NCTI), consistent with the modification in the OBBBA. The state will tax 50% of income recognized pursuant to IRC Section 951A, regardless of whether it is GILTI or NCTI, for taxable years ending on or after December 31, 2025. S.B. 1911 is pending the governor’s signature.
The Council of the District of Columbia introduced emergency legislation to temporarily decouple from certain provisions enacted in the OBBBA to allow the Council more time to review the federal tax changes. The legislation proposes to decouple from 13 of the 84 tax-related provisions, including: no tax on overtime; increased standard deduction; no tax on tips; special depreciation allowance for qualified property; and full expensing of domestic research and experimental expenditures. The legislation has been sent to the governor, whose response is due on December 2, 2025.
On October 7, 2025, Michigan Governor Gretchen Whitmer signed H.B. 4961, which updates Michigan’s date of conformity to the IRC to January 1, 2025 (previously January 1, 2018). In addition, H.B. 4961 decouples from select provisions of the OBBBA, such as: full expensing of domestic research and experimental expenditures; full depreciation allowance for qualified production property; increased deduction for interest expense; increased IRC Section 179 expensing cap; and 100% bonus depreciation.
In lieu of legislation, some states have issued guidance to address its conformity to the OBBBA.
Updated on November 10, 2025, the Alabama Department of Revenue published preliminary guidance on its conformity to the OBBBA. Most notably, Alabama has conformed to the 100% bonus depreciation, additional first year depreciation, full expensing of domestic research and experimental expenditures; and increased interest deduction caps. See here for the full publication.
On November 4, 2025, the Iowa Department of Revenue issues guidance regarding its rolling conformity to federal tax law. Specifically, the Iowa Department of Revenue announced that NCTI will be subject to Iowa corporate income tax because there is no statutory exemption in place for NCTI as there was for GILTI. Similarly, Iowa will conform to the deduction for foreign derived deduction eligible income (“FDDEI”) as it previously had for the foreign derived intangible income (“FDII”).
On November 3, 2025, Minnesota, a state with static conformity, announced that it has not adopted the federal changes related to H.R. 1. The Minnesota Department of Revenue has updated its forms and instructions to help taxpayer calculate nonconformity adjustments.
On October 1, 2025, Maine’s governor Janet Mills issues a Determination and Direction to the State Tax Assessor to temporarily adopt the Maine Department of Administrative and Financial Services’ report outlining conformity recommendations in full. This determination instructs the Maine Revenue Services (“MRS”) to adopt the OBBBA’s increased IRC 179 expensing limits and to allow immediate deduction of research and development expenses for certain small businesses only, retroactive to the 2022-2024 tax years only. In addition, the determination instructs the MRS to decouple from the following: immediate deduction of R&D expenses for all other businesses; 100% bonus depreciation; no tax on tips; and no tax on overtime.
Please note, this is just a few examples of states that have enacted legislation and/or guidance regarding conformity to the OBBBA. For any questions regarding the abovementioned states or states not mentioned, please contact Blaike Ordes at Blaike-lee.ordes@advantous.com.