Over the past 18 months, changes across federal tax policy, state sourcing, global taxation, financial disclosures, and equity have both created new planning opportunities and introduced new complexity and risk for CFOs as they consider tax planning strategies. None of these changes exists in isolation — they overlap, compound, and in some cases, directly conflict. The challenge for CFOs isn’t just understanding the rules but keeping pace with how quickly they have changed.   Meanwhile, their teams have spent the last two years focused on operations, cost pressures, and growth. Here are five developments finance leaders should have on their radar:

Digital Service Taxes are Widening Exposure

Governments are increasingly paying attention to the disparity between where digital activities occur and where taxes are actually paid. In response, Digital Services Taxes (DSTs) have been established. These tax regimes now exist in multiple countries, including the UK, France, and India, and often apply regardless of a company’s physical presence in those jurisdictions. Notably, these taxes are usually based on gross revenue rather than net profit and fall outside traditional tax treaty frameworks. This situation creates significant exposure for companies, which may find themselves liable for taxes in countries where they have limited means to offset those costs, raising the risk of double taxation. 

Advice for CFOs:

  • Identify where cross-border digital revenue creates tax exposure across jurisdictions
  • Model the financial impact on tax provisioning and transfer pricing arrangements
  • Evaluate whether the organization has the infrastructure and resources to manage multi-jurisdictional compliance

California State Rules are Changing

State-level tax rules are undergoing significant changes that can greatly impact financial outcomes, especially with California’s updated market-based sourcing rules that went into effect on January 1, 2026. These new rules will modify how service revenue and receipts from intangible property are attributed to the state, potentially impacting taxable income. Furthermore, California’s selective decoupling from federal tax provisions further complicates the situation. Companies that do not quickly adapt may face risks, including underpayment, compliance issues, overpayment, and missed planning opportunities.

Advice for CFOs generating revenue in California:

  • Reevaluate California revenue sourcing methodologies under the updated CCR §25136-2 framework
  • Confirm apportionment calculations reflect the new rules for 2026 tax years
  • Track federal-to-state differences that may impact modeling and estimated tax payments

Retroactive Federal Tax Reform Affects ASC 740

Recent federal tax changes—full bonus depreciation, revised R&D treatment, and updated interest limits—create opportunities to improve cash flow and tax positioning, but add complexity, especially where provisions are retroactive. This retroactivity allows companies to amend prior filings or revisit capitalization strategies, but capturing the benefit requires careful modeling. Without a reassessment, value is easily missed. Timing also matters: ASC 740 impacts must be reflected in the enactment period, and differing state conformity adds another layer of challenge. Companies that haven’t evaluated 2022–2024 implications should act quickly.

Advice for CFOs:

  • Remeasure deferred taxes in the enactment period under ASC 740
  • Evaluate retroactive R&D expensing and whether to amend prior returns
  • Model impacts of bonus depreciation and interest limits on cash taxes and forecasts

Expand Income Tax Disclosures

Income tax disclosures are expanding in ways that make company tax positions easier to analyze. New requirements require more detail on effective tax rate drivers, clearer breakdowns by jurisdiction, and more structured cash tax presentations. For many companies, this will be the first time this level of transparency appears in public filings, reshaping how investors, analysts, and regulators interpret tax positions. It’s crucial to treat this as more than a compliance exercise, with equal emphasis on accuracy and clarity to withstand scrutiny.

Advice for CFOs:

  • Assess current disclosures against new requirements and identify gaps
  • Align effective tax rate narratives with expanded disclosures
  • Evaluate how jurisdictional detail may be interpreted externally

QSBS Benefits and Tightened Eligibility

Recent updates to Qualified Small Business Stock (QSBS) have made the benefits more meaningful and easier to access, with higher exclusion limits and more flexibility around holding periods. For founders and early investors, the upside is stronger than ever. What hasn’t changed is the eligibility bar. Companies must maintain QSBS status over time, not just at the point of issuance. As organizations grow, raise capital, and evolve operationally, it’s easy to fall out of compliance without realizing it. These issues often surface years later, when the benefits are expected and can’t be fixed, meaning QSBS should be treated as an ongoing discipline that requires consistent oversight as the business evolves.

Advice for CFOs:

  • Maintain contemporaneous documentation of asset use and business activity
  • Reassess QSBS eligibility at major corporate events, including financings
  • Monitor changes that could affect qualification over time

Individually, each development is manageable; collectively, the interaction effects can be material. The primary risk is not a single missed requirement, but outdated assumptions. Finance leaders should incorporate these items into their 2026 planning by performing an impact assessment, updating provision and cash-tax models for enacted changes, validating readiness for expanded disclosure requirements, and establishing governance checkpoints for status-dependent positions such as QSBS. The goal isn’t to chase every change, but early analysis will preserve optionality before deadlines and reporting periods constrain available actions.

This article is for general information only and does not constitute valuation advice