s state legislatures prepare to convene early next year, they face a pivotal decision on whether to adopt a series of federal tax cuts enacted this year under President Donald Trump's signature "One Big Beautiful Bill" passed by Congress last summer.
The Treasury Department is urging states to “immediately conform” to key provisions of the new federal law, which offers temporary tax deductions for workers’ tips and certain overtime earnings, as well as breaks on interest for new automobile loans and deductions for business equipment.
Most states have yet to do so, according to The Associated Press.
Treasury Secretary Scott Bessent has publicly criticized Democratic-led states for not adopting the tax changes, which Trump signed in July 2025. While they become effective for federal returns, state tax codes in many places do not automatically mirror federal law.
