Tax Policy Developments Report - September 2025

Executive Summary

This report analyzes significant tax policy developments through September 2025, providing tax professionals with verified information for client planning and compliance strategies. The analysis covers federal cryptocurrency regulations, clean energy tax credits, multi-state employment considerations, and state-level tax changes.

Key Takeaway: While tax policy continues to evolve, practitioners must rely on verified official guidance rather than unsubstantiated claims circulating in professional networks.

Cryptocurrency Tax Regulations

Current Federal Guidance

The IRS established definitive guidance through Revenue Ruling 2023-14, which requires cryptocurrency staking rewards to be included in gross income when taxpayers gain "dominion and control" over the rewards, based on fair market value at the time of receipt. This ruling applies to both direct blockchain staking and exchange-based staking arrangements.

The ruling clarifies that this treatment applies whether the taxpayer stakes directly to a proof-of-stake blockchain or receives additional tokens through staking on an exchange, with the amount of includible income based on the reward's fair market value on the date the taxpayer gains dominion and control.

Professional Note: Practitioners should implement proper record-keeping systems for clients to document when dominion and control occurs for staking rewards, as this determines the timing and amount of taxable income.

Ongoing Litigation and Uncertainty

The release of Revenue Ruling 2023-14 comes as litigation regarding staking rewards continues in Jarrett v. United States, indicating that some aspects of cryptocurrency taxation remain under judicial review.

Clean Energy Tax Credits

Technology-Neutral Credits Implementation

The U.S. Department of Treasury and IRS released final rules for the Clean Electricity Investment and Production Tax Credits in sections 45Y and 48E, known as technology-neutral credits, which became effective for qualifying projects placed in service after December 31, 2024.

According to Department of Energy analysis, these tech-neutral credits, combined with other Inflation Reduction Act provisions, are expected to save American families up to $38 billion on electricity bills through 2030.

Clean Electricity Investment Credit (CEIC)

The Clean Electricity Investment Credit provides a base amount of 6% of qualified investment, which can be increased up to 30% for facilities meeting prevailing wage and registered apprenticeship requirements.

CEIC Credit Structure:

• Base Credit: 6% of qualified investment
• Enhanced Credit: Up to 30% with wage/apprenticeship compliance
• Domestic Content Bonus: Additional 10 percentage points
• Energy Community Bonus: Additional 10 percentage points

The credit phases out starting in 2032 or when U.S. greenhouse gas emissions from electricity reach 25% of 2022 levels, whichever occurs later.

Low-Income Communities Program

The Treasury Department released final rules for the Section 48E(h) Clean Electricity Low-Income Communities Bonus Credit Amount Program, which allocates bonuses to 1.8 gigawatts of clean electricity generation serving low-income communities annually from 2025 through at least 2032.

Treasury analysis of the first year of the 48(e) program showed over 54,000 applications from 48 states, the District of Columbia, and 4 territories, with approved applications expected to generate $3.5 billion in investments.

Multi-State Employment Tax Considerations

Remote Work Compliance Challenges

With projections that one in five Americans will work remotely by 2025, businesses must understand that hiring remote employees can establish nexus in every state where they live and work, requiring payroll tax withholding registration and potentially subjecting businesses to state income taxes.

Current Compliance Framework

Multi-state tax planning involves understanding nexus determination (when taxes are owed in each state), managing various tax types including sales, income, franchise, and gross receipts taxes, and leveraging strategies such as Pass-Through Entity Taxes (PTETs) to bypass SALT caps.

Practitioner Guidance: Conduct quarterly nexus reviews for clients with remote employees, tracking sales, employee locations, and business activities to identify new tax obligations before they become compliance issues.

Economic Nexus Developments

Following the 2018 Supreme Court case South Dakota v. Wayfair, economic nexus rules continue to evolve, with businesses owing taxes based on sales volume in states even without physical presence, typically triggered by exceeding state-specific thresholds such as $100,000 in sales.

State Tax Policy Changes

Income Tax Reductions

Twenty-eight states enacted and/or implemented individual income tax rate reductions since 2021, with several notable changes taking effect January 1, 2025.

Key state changes include:

• Arkansas: Top individual income tax rate reduced from 4.7% to 4.4% for tax years beginning on or after January 1, 2025 (S.B. 8, Sept. 2023).
• New Hampshire: Repealed its interest and dividends tax, joining seven other states with no individual income tax.
• North Carolina: Flat individual income tax rate dropped from 4.5% to 4.25% under H.B. 259, with a further reduction scheduled to 3.99% by 2026.

Business Incentive Programs

Nebraska's LB1023, effective January 1, 2025, allows employers to claim a tax credit of 50% of relocation expenses paid for qualifying employees (up to $5,000 per employee per tax year) if the employee earns $70,000 to $250,000 annually. Qualifying employees also receive a one-year exemption from state income taxes on Nebraska-sourced wages.

Research Highlight: The Tax Foundation's 2025 State Tax Competitiveness Index shows that states with better tax systems are more competitive at attracting businesses and generating economic growth, with mobile capital and labor gravitating toward jurisdictions with competitive advantages.

Professional Compliance Considerations

Source Verification Requirements

Tax professionals should verify all guidance through official government sources:

• Federal Tax Guidance: IRS.gov and Treasury.gov
• State Tax Information: Individual state department of revenue websites
• Research Resources: Established organizations like the Tax Foundation

Documentation Standards

Maintain meticulous record-keeping documenting income, payroll, property, and sales by state.
Conduct periodic internal audits to review state tax filings and catch discrepancies in sales tax collection, income apportionment, or payroll withholding.

Technology Solutions

Technology can streamline multi-state tax complexity through software solutions that provide automated monitoring, compliance tracking, and detailed record maintenance across multiple jurisdictions.

Key Recommendations

• Cryptocurrency Planning: Monitor IRS guidance developments and implement proper record-keeping for staking reward taxation under Revenue Ruling 2023-14.
• Clean Energy Credits: Evaluate CEIC eligibility for qualifying projects under the technology-neutral framework, considering prevailing wage and apprenticeship requirements for enhanced credits.
• Multi-State Compliance: Develop systematic approaches to nexus monitoring and compliance across jurisdictions, particularly for clients with remote workforce arrangements.
• Ongoing Monitoring: Establish processes to verify tax guidance through official sources and distinguish between legitimate regulatory developments and unsubstantiated speculation.

Professional Standard: Tax professionals must maintain rigorous verification standards when evaluating new developments, relying on official government guidance rather than secondary sources or unverified claims.

This report reflects publicly available information through September 16, 2025. Tax laws and regulations are subject to change. Professional consultation should be sought for specific client situations.