Cracking the Local Code: ABA SALT Committee Eyes Local Tax Reform in 2025

Local taxes have long been the unruly cousin of state tax policy—widely varied, inconsistently enforced, and often a trap for unsuspecting multistate businesses. But relief may be on the horizon: the ABA SALT Local Taxes Subcommittee announced in May 2025 that it is developing a new white paper aimed at tackling the complexity of local tax systems.

📍 Why Local Taxes Matter

While state-level taxes tend to dominate headlines, local taxes can be even more burdensome, especially in jurisdictions where thousands of cities, counties, and special districts impose independent obligations. From business license taxes to local sales and use taxes, the rules are often opaque, nonuniform, and enforced without the procedural protections common at the state level.

Multistate taxpayers face particular hardship when trying to comply with local requirements in states like Colorado, Louisiana, and Alabama—where the patchwork of tax jurisdictions creates compliance chaos.

📄 White Paper in Progress

The subcommittee confirmed that work is underway on a white paper that will provide:

• A national overview of local tax systems
• Analysis of major problem areas—such as sourcing, audit jurisdiction, and appeal rights
• Policy recommendations for improving uniformity, transparency, and due process

This is expected to be a significant reference document for both policymakers and practitioners, akin to the ABA’s influential model apportionment or administrative project efforts.

⚖️ Enforcement and Legal Landscape

While litigation over local tax authority continues to percolate through the courts, this white paper aims to address broader systemic problems that courts cannot fix alone. Key questions include:

• Who has the authority to audit—local governments or state departments?
• Are local tax appeal systems adequate?
• How can businesses obtain reliable guidance on their local obligations?

📊 Toward Policy Consistency

The Subcommittee’s work is expected to support broader ABA and COST initiatives seeking greater uniformity in substate taxation. The white paper may propose best practices for administrative simplicity, thresholds for nexus, and standards for enforcement authority.

🔎 What’s Next?

The draft white paper is still in early development, but the Local Taxes Subcommittee is inviting feedback, participation, and input from practitioners working in highly decentralized states. A formal draft is expected to circulate for comment before the ABA’s Fall 2025 meeting.

Bottom line: Local tax compliance is about to get a lot more attention—and maybe, just maybe, a little more sanity.