The year 2025 was highlighted by the enactment of the One Big Beautiful Bill Act (OBBBA) that created several business tax incentives and dealt with the expiring tax cuts in the Tax Cuts and Jobs Act (TCJA). With 2026 underway, businesses are likely to encounter a unique combination of new opportunities, changes, and challenges. Below is an overview of the top areas to consider for business tax planning in 2026.

Research and Experimental Expenditures 

After OBBBA, required amortization of domestic research and experimental (R&E) costs is permanently repealed, retroactive back to the beginning of 2025, presenting options for impacted taxpayers to recoup prior expenditures. R&E performed outside the U.S. continues to require capitalization and amortization over 15 years.

For businesses where R&E is a core function, the revised treatment of domestic R&E brings much-anticipated relief. The options provided will impact most taxpayers, and consideration, including modeling, should be taken when determining how to apply these changes.

Businesses claiming the R&D tax credit should also evaluate their current processes for identifying and documenting qualified research activities. IRS has recently updated the form for claiming the credit, introducing new sections that demand a substantial amount of information that is mandatory for tax years 2026 and beyond. These changes may require a review of current accounting systems and internal processes to ensure research activity can be tracked as required by IRS. Failure to meet these new requirements may lead to understated credit claims, or reductions or disallowance of credits under audit.    

State Conformity with the OBBBA

The OBBBA created several, and sometimes retroactive, tax benefits for the business community – 100% bonus depreciation, immediate expensing of domestic R&E expenses, and adding back depreciation and amortization to the Sec. 163(j) business interest limitation – to name a few. However, companies should not overlook whether states will conform or decouple from the federal law.

State taxable income may differ significantly from federal taxable income based on conformity/decoupling choices. Planning and compliance complexity increases because each state’s conformity status must be tracked separately, especially for depreciation, R&E, personal deductions, and business interest limitations.

Pillar Two – OECD Side-by-Side Framework

Though the United States has not enacted its own Pillar Two income inclusion rule (IIR) or undertaxed profits rule (UTPR), many foreign jurisdictions will apply Pillar Two to applicable U.S. parented groups. Rules are still evolving, and the OECD issued its inclusive framework on base erosion and profit sharing by adopting several safe harbors, collectively called the side-by-side system, that would exempt U.S. multinational businesses from some global minimum tax rules. 

Impacted businesses would benefit from modeling the Pillar Two effective tax rate (ETR) by jurisdiction and putting in place controls and documentation. The simplified ETR safe harbors are now scheduled to apply to fiscal years beginning on or before December 31, 2027.

The revised framework and delayed effective date do not relieve companies of immediate financial reporting obligations.

Workforce Mobility and Payroll Compliance

As companies expand globally, embrace remote work, and have more business travel, workforce mobility introduces complex tax challenges. Employees working across jurisdictions trigger multi-country/state payroll, income tax, and social security obligations. Increased audits from state tax authorities, challenges in tracking employees’ mobility details, and limitations in payroll systems underscore compliance issues.

Misalignment between where employees work and where compensation is booked can distort Pillar Two results.

Private Aircraft Ownership

Private aircraft ownership offers unmatched flexibility, privacy, and time-saving advantages for business owners. With the OBBBA reinstating 100% bonus depreciation, the potential tax savings can be significant. However, taking advantage of these opportunities demands meticulous attention to IRS rules, appropriate ownership structures, and detailed documentation.

Transaction Planning – Section 382 Studies to Preserve NOLs

As previously mentioned, the OBBBA enacted several tax benefits (e.g., 100% bonus depreciation, immediate expensing of domestic R&E expenses, and favorable changes to the Sec. 163(j) business interest expense limitation calculation) that may increase deductions in 2026 and potentially result in a net operating loss (NOL). Corporations that are generating a current year NOL or have carryforward NOLs (or other tax attributes) from prior tax years may need a Sec. 382 study to determine whether there are limitations on the future use of these tax attributes due to an ownership change. For many corporations, these attributes are the largest tax assets on the corporation’s financials, and there is an expectation that the corporation will be able to benefit from these attributes in the future.

A Sec. 382 analysis and the impact on the corporation’s ability to utilize its NOLs can be an important tool for management. Knowing the number of prior ownership changes that have occurred, and the related limitations, can also help management better forecast future tax attribute utilization and cash-flow needs, issues that may arise in due diligence if a sale is contemplated, potential restrictions on new stock issuances, etc.

Satisfying the Qualified Small Business Stock Exclusion

The OBBBA brought unexpected but welcome changes to the Qualified Small Business Stock (QSBS) exclusion. For stock issued after July 4, 2026, a taxpayer who satisfies the QSBS requirements may now exclude up to the greater of $15 million (up from $10 million) or 10 times the taxpayer’s basis in the stock sold. For a shareholder to benefit from the QSBS exclusion, the company issuing the shares must meet certain requirements. The OBBBA also raised the corporate asset test from $50 million to $75 million, with a future inflation adjustment, allowing companies to receive larger amounts of venture capital and maintain status as a qualified small business corporation for QSBS purposes. For QSBS shareholders needing to exit their position before the five-year holding period, the OBBBA created a new tiered system giving partial exclusion for three- and four-year holding periods. A QSBS analysis can identify if the shares are qualified, if the corporation is a small business corporation, and if the active business requirement has been met.

 
State and Local – Incentives for Data Center Site Selection

Data center site selection has entered a new era in which energy availability, pricing, and infrastructure have overtaken traditional tax incentives as the primary drivers of location decisions, particularly for hyperscale and AI-driven facilities. While states and localities continue to offer sales tax exemptions, property tax abatements, and investment credits, the after-tax cost and reliability of electricity now function as tax-equivalent incentives that can outweigh conventional subsidies.

Companies involved in the build-out of data centers must integrate energy economics into incentive modeling and site selection analysis, as successful projects depend on aligning tax policy, utility regulation, and infrastructure feasibility in an environment of rising energy constraints and public scrutiny.

Tariff Exposure and Refunds

With the U.S. Supreme Court decision on the legality of President Trump’s “emergency tariffs” expected soon (as of the date of this writing), importers who paid the tariffs are anxiously waiting to see whether they will be able to collect a refund of their paid tariffs. In an effort to clarify this issue, the Court of International Trade (CIT), in a December 15, 2025, ruling, said that “liquidation will not affect the availability of refunds" as the CIT has the authority to order reliquidation in cases involving the constitutional challenge to the tariffs. The government has promised to refund, with interest, any emergency tariff paid that is found illegal, and the CIT has now estopped the government from arguing a contrary opinion. It is unknown at this time whether importers will need to seek judicial orders or use an administrative refund process if the Supreme Court finds in favor of the plaintiffs.

The Takeaway

With the new year comes opportunities, changes, and challenges. Business owners and their advisors must consider these various issues and their impact on those businesses in 2026 and beyond.

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