The Critical Importance of State and Local Tax Planning for Business Owners

State and local tax (SALT) planning is no longer a luxury for business owners—it’s a necessity, and in some cases, can be a competitive advantage. Given the complex tax landscape across the United States, staying proactive about SALT obligations can mean the difference between optimizing cash flow and facing costly surprises.

Recent trends highlight the growing complexity of SALT compliance and tax code nuances from state to state. States are adopting aggressive measures to expand their tax bases, including new economic nexus laws, digital goods taxation, and changes to pass-through entity tax treatments. Dozens of states have passed new laws or made updates since late 2024 and some of them took effect as of January 1.

For business owners operating across multiple states, the risk of inadvertently triggering nexus is higher than ever, leading to potential penalties and back taxes.

State tax authorities are increasing enforcement in the form of:

• More frequent audits
• Closer review of businesses
• Steeper penalties for non-compliance

This makes it critical to understand where your business has tax obligations and how to leverage opportunities such as state-specific credits, deductions, and incentives. For example, many states offer significant benefits for investing in renewable energy, research and development, or hiring in certain zones.

Whether you’re expanding into new states, restructuring, or just navigating day-to-day operations, understanding the nuances of SALT is key to safeguarding your bottom line.

Don’t let the complexity of state and local taxes hold your business back. Download our comprehensive State & Local Tax Overview to stay informed about the latest changes to tax codes nationwide.

Take control of your SALT strategy today—because the cost of inaction can be far greater than the investment in preparation.