KPMG reports: Arkansas, California, New Mexico

Recent state and local tax developments

Recent state and local tax developments

KPMG’s This Week in State Tax—produced weekly by KPMG’s State and Local Tax practice—focuses on recent state and local tax developments.

  • Arkansas: Legislation that accelerates a phased-in corporate rate reduction was enacted. For tax years beginning on or after January 1, 2023, the highest corporate rate imposed on income exceeding $25,000 will drop to 5.3% (from 5.7%). There are no additional planned corporate income tax rate reductions, contingent or otherwise. In addition, effective for tax years beginning on or after January 1, 2022, Arkansas updated its conformity to IRC section 179 as it exists on January 1, 2022.
  • California: The California Senate is preparing to vote on Assembly Bill 1951, which would make the current partial sales and use tax exemption for manufacturing and R&D equipment into a full exemption from both state and local sales and use taxes on and after January 1, 2023, and before January 1, 2028.
  • New Mexico: The state tax authority issued proposed gross receipts tax rules on the taxability of digital advertising under current law. The proposed rules state that the “receipts of a provider of digital advertising services, whose digital platform may be accessed or viewed from within New Mexico, from the sale of advertising services to advertisers within and without New Mexico are subject to the gross receipts tax.” The rules also state that the levy of gross receipts tax on such advertising receipts “does not impose an unconstitutional burden on interstate commerce.” A public hearing on the proposed rules is scheduled to be held on September 8, 2022, and interested parties may submit written comments on or before the date of the hearing.

Read an August 2022 report prepared by KPMG LLP


The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization. KPMG International Limited is a private English company limited by guarantee and does not provide services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 3712, 1801 K Street NW, Washington, DC 20006.