August 2026 Compliance Roundup: Every US Federal and State Change That Matters

We tracked more than 40 federal and state compliance changes current through August 2026. A handful affect nearly every US business that runs payroll or sells across state lines. Two land specifically on foreign-owned LLCs. Most are single-state and only matter where you form, operate, or sell.

This roundup pairs every change with who it affects and what to do about it, and it lists the effective date on each. We dated each item to when it actually takes effect, not when it made the news, so you can rule yourself in or out fast.

TL;DR

• Start with the triage table: one row per change, with who it hits and what to do, so you can rule yourself in or out in about a minute.
• Federal and IRS: tips and overtime reporting is now mandatory on 2026 W-2s, the BOI exemption for US entities is permanent, and EIN proof went digital.
• Payroll: Ohio changed withholding on August 1, minimum wages rose July 1 in many cities, and several state leave and benefit rules now cover smaller employers.
• Sales and use tax: North Carolina and Kentucky changed economic nexus, Colorado raised its delivery fee, and several states updated rates and taxability guidance.
• Incorporation: Delaware got pricier to run, California and New Jersey cut some fees, and Florida, Wyoming, Missouri, and Texas changed how filings and records work.
• Delaware inspection rights: a Court of Chancery decision on Section 220 underscores keeping clear corporate records, including board minutes, consents, and financials.
• Foreign-owned entities: a dedicated section flags what changed for non-residents, followed by the deadlines worth putting on your calendar now.

Triage table: which August changes apply to you

Start here. Each row is a complete answer. If none of these describe you, skip to the foreign-owned-entity section and the deadlines list.

You probably have nothing to do this month if...

You run a single-member US LLC with no US employees, no physical presence in another state, and no sales into states beyond where you formed. Most of the items below will not touch you.

The exceptions are federal, and they sit in the foreign-owned-entity section near the end, so read that part even if you skip the rest.

Federal and IRS changes

The federal items with real teeth this month are payroll-reporting mandates and the changes to BOI and EIN proof. The international proposals matter to far fewer readers.

Tips and overtime now have to be reported separately on 2026 W-2s. The IRS updated its guidance on August 6, 2026 in Fact Sheet FS-2026-13. Starting with the 2026 tax year, employers must report qualified overtime in Box 12 using code TT, and qualified tips in Box 12 using code TP with an occupation code in Box 14b.

This is not the advisory "should track" that many summaries suggest. Reporting is mandatory, the 2025 penalty relief has expired, and a wrong amount means filing a corrected W-2c in early 2027.

The deductions are also capped and temporary. Overtime is capped at $12,500 (single) or $25,000 (joint), tips at $25,000, and both phase out above $150,000 of income ($300,000 joint). They run for tax years 2025 through 2028.

These are employee income-tax deductions, not payroll-tax exclusions. Nothing changes about FICA, Medicare, or your payroll-tax cost as the employer. If you run US payroll through a provider, confirm in writing that the new codes are enabled before your first 2026 run.

BOI reporting is now permanently off for US companies. FinCEN issued a final rule on August 11, 2026, effective August 14, that makes the earlier exemption permanent. A US-formed company and its US owners generally have no federal Beneficial Ownership Information obligation at all.

One exception remains for foreign-registered entities. An entity formed under foreign law that registers to do business in a US state is still a reporting company and must report its foreign beneficial owners within 30 days of that registration taking effect.

The final rule also dropped the US-person "company applicant" reporting that foreign reporting companies previously faced.

EIN verification went digital, with a catch. Eligible Business Tax Account users can now download a digital CP575 EIN Verification Notice instead of requesting a Letter 147C. It works as a substitute for the original EIN notice, which is useful for bank and payment-processor onboarding.

The catch matters for foreign founders. Business Tax Account access runs through ID.me, which typically requires a US SSN or ITIN and US-recognized identification. Founders who cannot complete ID.me still call the IRS Business and Specialty Tax Line for a 147C.

New charitable-deduction floors take effect for the 2026 tax year. Under the 2025 tax law, itemizing individuals can deduct charitable gifts only above 0.5% of AGI, and corporations only above 1% of taxable income. Donations under those floors produce no deduction, and the corporate shortfall is permanently lost, not carried forward.

An offset softens this: a new deduction of up to $1,000 (single) or $2,000 (joint) for non-itemizers, plus a 35-cent-per-dollar cap on the benefit for top-bracket filers.

If you or your C-corp give regularly, it can help to model the floors and consider bunching gifts before year-end. Confirm the treatment with your tax professional for your own situation.

Business interest deduction (Section 163(j)). The IRS updated its Section 163(j) guidance in August 2026 in Fact Sheet FS-2026-14, addressing how the business interest limitation applies to certain interest expense and related calculations.

Businesses with significant interest expense, especially those using debt financing, should review the updated guidance with their tax advisor and check whether their 2026 interest deductions are affected.

A few federal items are narrower and worth only a line each:

• Proposed Section 987 foreign-currency rules (REG-103844-26, August 14) may simplify calculations, but only for businesses with a controlled foreign corporation or foreign branch, not for a US company that merely invoices in another currency. These are proposals, not final rules.
• Proposed Section 250 rules (REG-117130-25, August 20) would exclude gains on intangible and depreciable property from the FDII deduction, while preserving inventory and software-copy sales. Relevant mainly to US exporters and IP owners.
• Limited-partner self-employment tax is unsettled. Federal courts are split on whether an active limited partner owes SE tax on their share, and the August news was a court filing, not new guidance. If this could describe you, review your position with a tax advisor before filing.
• The enhanced Premium Tax Credit expired on December 31, 2025. The old 400%-of-poverty eligibility cliff is back, and self-employed founders buying marketplace coverage may pay materially more in 2026. A Senate extension was still pending, so treat any retroactive fix as possible but not enacted.
• Refundable tax credits. Proposed IRS regulations issued in August 2026 address eligibility requirements for the refundable portions of certain individual tax credits, including the Child Tax Credit, Earned Income Tax Credit, American Opportunity Tax Credit, and Adoption Tax Credit.
• Ask your CPA whether they keep a WISP. An August 18 IRS reminder (IR-2026-92) restated that paid tax preparers must maintain a Written Information Security Plan under the FTC Safeguards Rule. It is a fair diligence question for any firm holding your entity data.

Payroll and workforce

Only Ohio is genuinely new in August. The rest took effect on July 1, which means an employer with even one remote worker in the wrong place may already be behind.

Ohio updated its withholding tables as of August 1, 2026. The tables apply to payroll periods ending on or after August 1, 2026. The highest percentage-method withholding rate is now 3.4% (down from 3.64%), and the supplemental rate for bonuses and commissions is 2.75%.

The change follows Ohio's move to a flat 2.75% income tax, with the first $26,050 of annual income not subject to Ohio income tax. Municipal income-tax rules are not changed by this update, and employers should update their payroll tables accordingly.

Minimum wages rose on July 1 in many states and cities. Where a state, county, and city rate overlap, the highest applicable rate governs, and you apply the rate for where each employee actually works. A remote hire can quietly put you under a city ordinance you never registered for.

Several state leave mandates now reach smaller employers. These carry employee-count thresholds that often count your whole company, not just the workers in that state, so the counting is where businesses get it wrong. When a threshold is close, confirm coverage with an employment attorney or your payroll provider.

• New Jersey Family Leave Act (effective July 17) now covers employers with 15 or more employees, counted company-wide, down from 30. Eligibility fell from 12 months and 1,000 hours to 3 months and 250 hours. The leave is unpaid job protection, with pay from the separate state insurance program.
• Illinois NICU leave (effective June 1) covers employers with 16 or more employees, giving up to 10 days at 16 to 50 employees and up to 20 days at 51 or more, with penalties up to $5,000 per affected employee.
• Nebraska paid sick leave has applied since October 2025 to employers with 11 or more employees, and requires three specific sick-leave figures on every pay stub, which most default payroll templates do not print.

Maryland FAMLI contributions begin January 1, 2027. Maryland's Family and Medical Leave Insurance program begins payroll contributions on January 1, 2027, at 0.9% of covered wages, generally split between employers and employees.

Employers with fewer than 15 employees have different obligations and generally remit only the employee share. Benefits are scheduled to begin in January 2028.

Trump Accounts. Proposed rules address employer contributions to Trump Accounts. Employers may contribute up to $2,500 per employee per year, subject to the applicable rules and overall contribution limits.

Employers weighing this as a benefit should review the contribution and reporting requirements before starting a program.

FUTA credit reduction (California and the US Virgin Islands). California and the US Virgin Islands remain subject to potential FUTA credit reductions for 2026. The applicable rates and any waiver determination should be treated as projected or pending until finalized by the US Department of Labor.

Sales and use tax

Two nexus changes matter to online sellers and SaaS founders. Most of the rest are single-state rate or guidance moves that only apply if you operate or ship there.

North Carolina added a grace period for remote sellers. As of July 2, 2026, North Carolina gives remote sellers a runway. A seller whose only trigger is crossing $100,000 in North Carolina gross sales is not treated as engaged in business right away.

Collection begins on the first day of the first calendar month at least 60 days after crossing. In practice that is roughly a 60-to-90-day window, so diary the month boundary rather than a clean date.

A seller with physical presence or any other trigger still registers immediately.

Kentucky changed nexus and taxed a new service on August 1, 2026. Kentucky dropped the 200-transaction prong of its economic-nexus test, leaving a sales-only threshold of $100,000.

It also extended sales tax to data-brokering services, defined as collecting, aggregating, and analyzing personal data for sale to a third party. If you sell data or analytics into Kentucky, check whether your offering meets that definition.

Colorado raised its retail delivery fee. The fee rose from $0.28 to $0.31 per qualifying delivery on July 1, 2026. It applies per order that includes at least one taxable item, and retailers with $500,000 or less in prior-year Colorado sales are exempt. If you are above that line, update checkout now.

These rate and location changes only matter if you touch those places:

• Alabama, Autauga County: the general sales and use rate rises from 2% to 2.5% on September 1, plus a new 3% county rental tax on tangible personal property. Prattville's combined rate reaches 10.0%.
• New York local motor fuel: effective September 1, five counties change how the local tax is calculated. Orange, Putnam, and Oswego move to a cents-per-gallon method, while Onondaga and Ulster revert to the percentage-rate method, so fuel sellers reload rates in both directions.
• North Carolina data centers: the sales tax exemption for electricity at qualifying data centers was repealed (enacted July 7, 2026), and the 7.0% rate applies to billing periods beginning on or after August 6. A new quarterly report is required, with the first due October 30, 2026.
• North Carolina peer-to-peer vehicle rentals: effective October 1, these are taxed under the alternate highway-use tax on Form E-500F, not sales tax, at 8% short-term, 3% long-term, and 5% for subscriptions. Register before October 1 if you run or list on a car-sharing platform there.
• Tennessee, Davidson County: the local tax on food and food ingredients drops from 2.25% to 1.75% on November 1. The state 4% food rate is unchanged, and the 2.25% local rate still applies to other goods and services. Food sellers should update POS systems before then.
• Indiana, DeKalb County: the county innkeeper's tax was authorized to increase from 5% to 8%. Businesses should confirm the county's effective date before updating their systems.
• West Virginia, Randolph County: a 0.4% ambulance fee on sales-taxed transactions was suspended by the county in July after the state flagged a Streamlined Sales Tax Agreement problem, and the Attorney General later called it an illegal tax. Businesses that collected it had to stop and support refunds.

Several states also updated taxability guidance rather than rates:

• Streamlined Sales Tax matrices (Indiana, North Carolina, Washington): all three updated their SST taxability matrices and certificates of compliance for the annual August 1, 2026 cycle. Businesses using SST classifications should review their product taxability settings.
• California district taxes: CDTFA Publication 44 (revised June 2026) restates how district taxes apply, including place-of-sale rules, when a business is engaged in business within a district, and district use-tax collection. Sellers into California should confirm local tax is based on the applicable location.
• Vermont use tax: Vermont's use-tax guidance covers calculation, filing and payment, local option taxes, and what to do when complete purchase records are unavailable, and includes a use-tax worksheet. Businesses buying from out-of-state vendors that did not charge Vermont tax should review their use-tax reporting.

Industry-specific guidance. Several states have issued or clarified guidance affecting specific products and business models:

• Medical products: guidance addresses qualifying tissue grafts, regenerative medicine, and related products, which some states tax at reduced rates.
• Party rooms and food or beverage: taxability often turns on whether the room and the food or beverage are charged separately.
• Storage containers and specialized products: check the applicable state guidance for product-specific taxability.
• DNA testing and similar services: classification for sales tax can vary by state.

Businesses selling specialized products or services should confirm their taxability classifications with the applicable state.

New York local occupancy taxes. Several New York counties changed local hotel and motel occupancy taxes and other county-level rules in 2026. Lodging operators should check the applicable local rate and effective date for each location.

Incorporation and entity filings

Delaware got more expensive to run. California and New Jersey trimmed some fees. Florida, Wyoming, Missouri, and Texas changed how records are searched and how filings are made.

Delaware entity fee updates. Delaware House Bill 400 was enacted in May 2026. The legislation increases the annual tax for Delaware LLCs, LPs, and GPs from $300 to $400 for the 2026 tax year, payable in 2027.

Several filing-fee increases also took effect August 1, 2026, including higher expedited-service fees.

California first-year franchise tax. For tax years 2027 through 2029, the first-year California franchise tax for qualifying newly formed LLCs, LPs, and LLPs is reduced from $800 to $400. The change applies to the first taxable year for qualifying entities formed on or after January 1, 2027.

California moved key filings online. Since July 1, dissolution, withdrawal, and registered-agent resignation filings for corporations and LLCs must go through BizFile Online, and the paper forms are gone.

Separately, from August 1, web User Access is required for Statement of Information filings, which takes setup time and can block a last-minute filing if you have not enrolled.

Florida protected series LLCs. Florida's protected series LLC provisions became available July 1, 2026. Each registered series has a $25 filing fee, filings are completed online, and the parent LLC must report its active series on its annual report.

Businesses using a Florida series structure should review the registration and annual-report requirements for each protected series.

Wyoming business filing fees. Wyoming's updated fee schedule took effect July 1, 2026. Key changes include a $100 LLC formation fee, a $350 LLC reinstatement fee when there is no registered agent, and a $10 fee per series LLC. Review the current schedule before forming or reinstating in Wyoming.

Missouri gave each LLC series its own record. Under a law effective August 28, 2026, each series of a Missouri series LLC will be individually searchable and can receive its own certificate of good standing. The searchable profiles are not required to be live until January 31, 2027, so the practical benefit arrives then.

Once built, it makes per-series banking and counterparty diligence far easier.

Texas expedited filing (Texas Express). Texas now offers statewide expedited Secretary of State filing through Texas Express, with full rollout on July 14, 2026. The tiers are Same Day $750, Next Day $500, and Standard Expedited $50, each in addition to the applicable filing fee.

Businesses that need expedited filings should pick the service level that fits the deadline.

Three smaller items round out the month:

• New Jersey cut several formation fees by $25 as of July 1, so a new LLC or corporation now costs $100 to form. Annual report fees are unchanged.
• Nebraska revised its UCC and tax-lien fee schedule effective July 15, mostly affecting lenders and lien filings rather than routine formation.
• Connecticut's updated Trade Name Registry requirements take effect October 1, 2026, so businesses should review the new registration and certificate requirements ahead of the date.

Delaware Section 220 Inspection Rights

Delaware Court of Chancery decisions in August 2026 addressed stockholder inspection rights under amended Section 220 of the Delaware General Corporation Law. The decisions emphasize the role of formal corporate records and the requirements for obtaining additional materials.

The lead decision, issued August 6, 2026 in City of Pontiac Police and Fire Retirement System v. Dayforce, applied the 2025 amendments to Section 220. These were Court of Chancery rulings, not a Supreme Court decision.

Under those amendments, the enumerated formal records are both the main thing a stockholder can reach and the evidence a court relies on in a dispute. Those records include board and stockholder minutes, consents, materials provided to the board, and annual financial statements.

In Dayforce, the court found a credible basis to investigate. The company's proxy narrative diverged from its board minutes, and its executive sessions were not separately documented.

It still denied inspection of those informal materials. The amended standard requires a compelling need and clear and convincing evidence for anything outside the enumerated list.

The practical takeaway is to maintain contemporaneous board minutes, financial records, and other formal corporate records. Where a company keeps no formal record, a court can order production of a "functional equivalent."

Foreign-owned US entities

Several of this month's items apply differently to foreign-owned US entities. Here is where each one stands.

BOI reporting for US-formed entities. BOI reporting requirements for US-formed entities changed under the final FinCEN rule effective August 14, 2026, which made the exemption permanent.

An entity formed under foreign law that registers to do business in a US state remains a reporting company and files for its foreign owners within 30 days of registration.

Digital CP575 EIN verification. US owners with a Business Tax Account can now download a digital CP575. Access runs through ID.me, which generally requires a US SSN or ITIN, so many foreign founders continue to request a Letter 147C by phone.

Form 5472 requirements are unchanged. Form 5472 filing requirements remain unchanged. A foreign-owned single-member US LLC generally files Form 5472 with a pro forma 1120 even at zero revenue, with a minimum penalty of $25,000. A filing obligation can exist even when no tax is due.

Sales-tax nexus. Where remote contractors and customers are located can create sales-tax filing obligations in additional states. The North Carolina and Kentucky changes above are examples, and these obligations continue to apply.

Scope of the international tax proposals. A typical US LLC or C-corp without a controlled foreign corporation, foreign branch, or relevant IP-export activity is generally outside the scope of the Section 987 and Section 250 proposals.

Deadlines to diary

Confirmed dates worth putting on the calendar now:

• September 1, 2026: Alabama Autauga County rate and rental tax; New York local motor-fuel method change.
• September 30, 2026: Florida minimum wage rises to $15.00.
• October 1, 2026: North Carolina peer-to-peer vehicle registration and Form E-500F; Connecticut Trade Name Registry requirements.
• October 30, 2026: North Carolina data-center first quarterly report due.
• November 1, 2026: Tennessee Davidson County food-tax cut.
• November 10, 2026: Department of Labor finalizes FUTA credit-reduction states.
• January 1, 2027: Maryland FAMLI contributions begin; California's $400 first-year tax starts.
• January 31, 2027: 2026 Form 940 FUTA settlement; Missouri series records must be searchable.

How FinStackk Helps You Stay Ahead of Compliance Changes

Tracking this many moving rules across federal, state, county, and city levels is exactly the problem we built the platform to handle. Complyy tracks your requirements across every jurisdiction you touch, so a change like the ones above surfaces before it becomes a penalty.

Fin-Tax manages your tax and sales-tax deadlines and filings, Fin-Hire runs payroll with the current codes and state rules built in, and Fin-Start handles incorporation and registered-agent work.

Every module is staffed by real CPAs, not chatbots. If you want a second set of eyes on what applies to your entity, get in touch.

FAQ

What business compliance changes took effect for US businesses through August 2026?

The changes that reach the most businesses are federal payroll-reporting rules and a few state updates.

Employers must now report qualified tips and overtime separately on 2026 W-2s, the FinCEN rule exempting US companies from BOI reporting became permanent on August 14, and new charitable-deduction floors apply for the 2026 tax year.

On the state side, Ohio updated withholding on August 1, minimum wages rose July 1 in many cities, and North Carolina and Kentucky changed economic nexus for remote sellers.

Do foreign-owned US LLCs still have to file a BOI report after the 2026 FinCEN rule?

Generally no. The FinCEN final rule effective August 14, 2026 permanently exempts companies formed in the United States, and their US owners, from Beneficial Ownership Information reporting. That includes a Delaware or Wyoming LLC owned by a founder abroad.

The exception is an entity formed under foreign law that registers to do business in a US state, which is still a reporting company and must report its foreign beneficial owners within 30 days of registration. Because this area keeps moving, confirm your current status before relying on any exemption.

What is the No Tax on Overtime deduction, and what do employers have to do for 2026 W-2s?

It is a temporary federal income-tax deduction, available for tax years 2025 through 2028, that lets eligible employees deduct qualifying overtime up to $12,500 (single) or $25,000 (joint), phasing out at higher incomes.

It is a deduction on the employee's return, not a payroll-tax exclusion, so FICA and employer payroll taxes are unchanged.

For 2026, employers must report qualified overtime in Box 12 of Form W-2 using code TT. The 2025 penalty relief has ended, so payroll systems need the code enabled before the 2026 W-2 run, or the employer files corrected W-2c forms.