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Tax experts outline state-level uncertainty following federal tax reform

Jul 29, 2025 · Authored by Andrew Whitehair, Shannon Bonner

Federal tax reform is here, and it is going to test state tax systems.

Baker Tilly’s Shannon Bonner and Andy Whitehair shared with Thomson Reuters the implications of the One Big Beautiful Bill Act. With many state legislatures already adjourned, most will wait until 2026 to evaluate how they conform. Here’s what states and taxpayers need to watch:

Conformity approach (rolling vs. fixed)
A $40,000 state and local tax (SALT) deduction cap — with a steep phaseout
Retroactive effects and year-end planning
Global intangible low-taxed income (GILTI) and foreign-derived intangible income (FDII) treatment at the state level

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