Supreme Court Peters v. Cohen: Major Unclaimed Property Case
By Freda Pepper, General Counsel, Unclaimed Property
Sovos regulatory team is tracking the latest Supreme Court Peters v. Cohen, a landmark case that raises fundamental questions about how state unclaimed property laws handle dormant assets and the constitutional protections owed to property owners. This Supreme Court Peters v. Cohen petition presents issues that could affect millions of Americans and establish new precedents for state escheat laws across the country, potentially reshaping unclaimed property law nationwide.
Background: What Is Peters v. Cohen?
Supreme Court Peters v. Cohen centers on a German citizen whose Amazon stock was seized by California’s unclaimed property program under questionable circumstances. The case challenges the constitutionality of current state unclaimed property laws and could establish important precedents for unclaimed property compliance requirements. The petition was filed in June 2025 and is pending before the Supreme Court, which typically decides whether to grant review during its regular conference process.
Facts of the Case
Jan Peters, a German citizen, owned Amazon stock that was reported to California’s unclaimed property program. According to the Supreme Court Peters v. Cohen petition, Peters’ German address was changed from “D-80804 Munich, Germany” to “Munich, CA 00000” in the reporting process. Notice was then mailed to this address, which Peters never received. California subsequently took custody of the stock and sold it for approximately $1.6 million in 2020. Due to stock appreciation and splits, those shares would be worth over $4.2 million today.
Peters filed suit alleging violations of his constitutional rights under the Due Process and Takings Clauses, seeking declaratory and injunctive relief. Lower courts dismissed his claims, finding that the Eleventh Amendment’s grant of sovereign immunity barred relief against the state.
The case highlights critical issues with current state unclaimed property laws, particularly regarding notice procedures and address verification requirements that may fall short of constitutional standards.
Due Process Claims Challenge State Escheat Laws
The Supreme Court Peters v. Cohen petition argues that California’s notice procedures fail to meet constitutional standards established in cases like Mullane v. Central Hanover Bank (1950) and Jones v. Flowers (2006). The petitioner contends that current state escheat laws create several constitutional problems related to due process unclaimed property requirements.
Under current unclaimed property law, no individual notice is required for property under $50, meaning millions of small accounts receive only generic newspaper advertisements that may not effectively reach property owners. The petition raises concerns about address verification procedures and alleges that states don’t take adequate steps to verify or update addresses before declaring property abandoned.
Additionally, the petition argues that the state’s reliance on post-seizure remedies, such as requiring owners to search a website after their property has already been transferred to state custody, fails to provide the pre-deprivation notice required by the Constitution for due process unclaimed property protections.
Takings Clause and Property Value Disputes
The takings clause unclaimed property argument in Supreme Court Peters v. Cohen contends that California’s practice constitutes a physical taking under Horne v. Department of Agriculture (2015). The argument centers on the state’s practice of taking title to property and often selling it immediately, creating a permanent deprivation of the original asset.
Once property is sold under current unclaimed property law, the original items are not returned to owners; owners only recover the sale proceeds rather than the current value of their property. This takings clause unclaimed property issue is particularly significant in cases involving appreciating assets like stocks and digital assets, where the difference between historical sale prices and current values can be substantial.
Legal Precedents & Circuit Split
This constitutional unclaimed property case arises against a backdrop of evolving jurisprudence around state escheat Supreme Court decisions. In 2016, Justices Alito and Thomas wrote in Taylor v. Yee that “the constitutionality of current state escheat laws is a question that may merit review in a future case,” noting concerns about shortened dormancy periods and minimal notification procedures.
Several federal circuits have addressed similar issues with varying results, creating potential conflicts that the Supreme Court could resolve through the Supreme Court Peters v. Cohen decision.
How States Defend Their Unclaimed Property Programs
States typically defend their unclaimed property programs on several grounds that reflect legitimate policy concerns under current unclaimed property law. They argue these programs provide essential consumer protection by preventing businesses from indefinitely holding dormant accounts without oversight. States contend that centralized systems may be more effective at reuniting owners with property than leaving assets with individual businesses, which may lack resources or incentives to conduct extensive searches for missing owners.
California has specifically argued that its procedures comply with constitutional requirements and that the Eleventh Amendment provides immunity from certain types of lawsuits challenging state operations. The state maintains that its notice procedures are reasonably calculated to reach property owners and that adequate post-deprivation remedies exist for owners to reclaim their property under existing state unclaimed property laws.
What’s Next: Supreme Court Timeline
The Supreme Court Peters v. Cohen petition is currently pending before the Supreme Court. The Court typically decides whether to grant review during its regular conference process, with decisions announced on scheduled opinion days. Whether the Court chooses to hear the case will depend on factors including the importance of the constitutional questions presented, the existence of circuit splits, and the potential for providing guidance to lower courts and state governments.
The petition argues that review is warranted given the scope of these programs and the constitutional principles at stake in constitutional unclaimed property law.
Conclusion
Supreme Court Peters v. Cohen presents the Supreme Court with an opportunity to clarify important constitutional principles governing state unclaimed property laws. The case involves the intersection of state fiscal policy, individual property rights, and federal constitutional protections—issues that affect millions of Americans and billions of dollars in assets.
The outcome could establish precedents that govern state escheat laws for years to come, potentially affecting how states balance their roles as protectors of unclaimed property with their fiscal interests in these increasingly significant revenue sources. For Sovos and other practitioners focused on unclaimed property compliance, this case represents a potential watershed moment in the evolution of unclaimed property law.
The National Association of Unclaimed Property Administrators (NAUPA) has approved a major update to their electronic reporting standards with the introduction of the NAUPA III file format. This significant advancement in unclaimed property reporting represents a modernization effort that aims to streamline the submission process while improving accuracy and efficiency for all stakeholders involved in reuniting owners with their assets.
What Is the NAUPA III File Format?
The NAUPA III file format is the latest version of NAUPA electronic reporting standards, marking a transition from traditional fixed-width data structures to XML (Extensible Markup Language). This new unclaimed property file format update is designed to provide greater flexibility and user-friendliness while maintaining the highest standards of data accuracy and integrity. The NAUPA III XML format represents a significant step forward in modernizing unclaimed property compliance processes across all jurisdictions.
Key Changes in the NAUPA III Format
The NAUPA III file format introduces several critical improvements to unclaimed property reporting:
XML-Based Structure: The most significant change is the shift from the previous fixed-width format to the NAUPA III XML format. This transition makes the format more flexible and user-friendly, allowing for better data validation and easier integration with modern systems.
Enhanced Data Elements: The updated format includes refined data elements with clearer descriptions and improved codes. These enhancements are designed to help property holders submit more accurate reports while enabling states to better locate rightful owners of unclaimed assets.
Improved Validation: The NAUPA III XML schema provides better data validation capabilities, reducing errors and improving the overall quality of unclaimed property reporting submissions.
NAUPA III Implementation Timeline
Understanding the implementation timeline is crucial for unclaimed property compliance planning:
Initial Rollout: Jurisdictions are expected to begin accepting NAUPA III file format submissions in Fall 2026 at the earliest. This timeline allows organizations adequate time to prepare for the transition and update their systems accordingly.
Transition Period: The NAUPA III format will run alongside the existing NAUPA II format during a transition period, ensuring continuity in unclaimed property reporting while organizations adapt to the new requirements.
Jurisdiction-Specific Information: Organizations can verify accepted formats for their specific jurisdiction at unclaimed.org/state-reporting, as implementation may vary by state.
Resources and Support from NAUPA
To facilitate a smooth transition to the NAUPA III file format, NAUPA is providing comprehensive support:
XML Schema Definition (XSD) Files: NAUPA will provide NAUPA III XML schema files that offer detailed guidance for creating and validating XML submissions before filing. These resources ensure proper formatting and reduce submission errors.
Training and Education: The organization has committed to providing upcoming training sessions and additional resources to help property holders adapt to the new NAUPA electronic reporting requirements.
Technical Documentation: Comprehensive documentation will be available to support the implementation of the NAUPA III XML format, including best practices and troubleshooting guides.
How Sovos Is Supporting Clients Through the Transition
Sovos is committed to ensuring a seamless transition to the NAUPA III file format for all our clients:
Comprehensive Format Review: Our team is actively reviewing the new NAUPA III format specifications and all supplementary resources provided by NAUPA to ensure seamless integration for our clients’ unclaimed property reporting needs.
Training Participation: We will participate in the upcoming NAUPA training sessions to gain comprehensive insights into the format requirements and best practices, ensuring our team is fully prepared to support client implementations.
Client Support and Resources: Sovos will provide a detailed summary of the key components and changes in the NAUPA III file format to help our clients prepare for this transition and maintain compliance with evolving unclaimed property reporting standards.
Ongoing Compliance Support: Our commitment extends beyond the initial transition, with ongoing support to ensure continued compliance with NAUPA electronic reporting requirements as they evolve.
The introduction of the NAUPA III file format represents a significant advancement in unclaimed property compliance technology. By staying informed about these changes and working with experienced partners like Sovos, organizations can ensure they remain compliant while benefiting from the improved efficiency and accuracy that the new XML-based format provides.
Effective July 14, 2025, the German Ministry of Finance (BMF) issued an amendment to the GoBD (German Principles on Bookkeeping), aligning the country’s digital archiving requirements with the upcoming mandatory B2B e-invoicing as of January 1, 2025.
The update provides long-awaited clarity for taxpayers and software providers regarding the format, retention, and machine readability requirements for structured e-invoices, especially in hybrid formats like ZUGFeRD.
Key Takeaways:
PDFs not required for archiving – For fiscal purposes, the XML component of structured e-invoices issued under Section 14(1) of the German VAT Act is considered the legally relevant element and must be archived. A separate PDF copy is not required, provided a graphical representation with identical content can be generated on demand. This aligns archiving practices more closely with the new e-invoicing regulations.
Format of receipt must be stored – The format in which an invoice is received determines how it must be archived. Even if converted for processing, the original file structure must be retained to meet audit requirements.
Archiving of ZUGFeRD and hybrid formats – Hybrid formats like ZUGFeRD are now explicitly referenced in the GoBD. In these cases, the embedded structured XML is considered the legally binding element and must be archived accordingly.
Sovos is proud to be a Silver Sponsor of the Gartner CFO & Finance Executive Conference 2025 — the premier event for CFOs and finance leaders navigating today’s most critical priorities. From managing risk and boosting efficiency to driving profitability and long-term growth, this conference delivers expert insight for success in an increasingly volatile and uncertain environment.
We’re excited to be hosting our own session:
Built for Visibility, Driven by Compliance: Unlocking the Composable Enterprise.
Join Ryan Ostilly, VP Product Management, as he explores how enterprises can respond to two major revolutions — real-time tax demands and AI-driven ERP transformation. Learn how modular systems can enable “mirror visibility” with tax authorities by connecting core business functions to a dedicated tax suite. Discover how aligning internal and external data reduces risk, enhances agility and builds trust by ensuring compliance in a rapidly evolving regulatory world.
With the finance landscape changing fast, we can’t wait to engage with industry leaders and peers on the future of tax, finance and transformation.
Sovos is proud to be a Premium Sponsor of the 9th Indirect Tax & VAT Management Summit — the leading event for global tax professionals tackling the biggest challenges in indirect tax and VAT. This two-day summit promises expert panels, real-world case studies and hands-on insights into the future of digital tax.
With mandates like the EU’s VAT in the Digital Age (VIDA) and global shifts in tax reporting, it’s never been more critical to stay ahead. We can’t wait to join industry leaders and peers as we explore the impact of e-invoicing, tax automation and cross-border compliance.
Don’t miss our session with Christiaan Van Der Valk, GM Indirect TaxTech.
Stationsplein Zuid-West 951, 1117 CE Schiphol, Amsterdam, Netherlands
The Federal Inland Revenue Service (FIRS) has confirmed in a July 2025 notice that its National E-Invoicing Solution, based on the Merchant-Buyer model, will become mandatory for large taxpayers beginning 1 August 2025. This follows a successful pilot phase that began in November 2024.
Under the mandate, by the deadline above, all businesses with annual turnover of N5 billion (~€2.9 million) and above must:
Register and onboard to the e-invoicing platform
Integrate their invoicing systems with the FIRS platform according to specified requirements
Commence real-time invoice generation, validation, and transmission
The system implements different models based on transaction type: B2B and B2G invoices require clearance from FIRS before being sent to buyers, with each invoice receiving a unique IRN and cryptographic stamp. B2C transactions follow a reporting model where invoices can be issued directly to customers but must be reported to FIRS within 24 hours.
This implementation marks a significant step in Nigeria’s digital tax transformation agenda, aimed at enhancing transparency, reducing fraud, and improving tax compliance across the country’s business landscape.
For future updates on Nigeria and similar developments in other countries, subscribe to our Regulatory Analysis page.
On July 4th, President Trump signed the “One Big Beautiful Bill,” which dramatically alters Form 1099-K, 1099-MISC and 1099-NEC reporting thresholds, effective for payments made after December 31, 2025.
Section 70432 of the “One Big Beautiful Bill” significantly changes Form 1099-K reporting requirements for third-party settlement organizations. Previously, under the American Rescue Plan Act of 2021, these organizations were required to issue Form 1099-K for any payee receiving payments exceeding $600 in a calendar year. However, the implementation of this requirement was delayed multiple times. The IRS maintained the $20,000/200 transaction threshold for tax year 2022 and 2023, then established transitional thresholds of $5,000 for 2024 and $2,500 for 2025. Now, the new legislation permanently reinstates the pre-2021 de minimis exception, requiring Form 1099-K only when a payee receives more than $20,000 in payments and conducts more than 200 transactions in a calendar year starting with transactions occurring in tax year 2026.
Section 70433 raises the reporting threshold for Forms 1099-MISC and 1099-NEC. Under the previous Section 6041 requirements, businesses had to issue these forms for payments of $600 or more to independent contractors and service providers. The new legislation increases this threshold to $2,000 for payments made after December 31, 2025, and includes an automatic inflation adjustment mechanism. Starting in 2027, this dollar amount will increase annually based on the cost of living, rounded to the nearest hundred dollars.
The legislation also modifies withholding procedures for qualified tips and overtime compensation. Starting in 2026, Treasury must update tax withholding rules for the new tip deduction. Until then, employers can use reasonable estimates when reporting overtime payments on tax forms, providing some flexibility during this transition period.
The backup withholding requirements for third-party payment platforms align with the new Form 1099-K thresholds, ensuring consistency across the tax reporting framework. During the transition years, the IRS provided penalty relief for 2024 for failures to withhold and pay backup withholding tax. Under the new legislation, backup withholding is required for payees that meet the reinstated $20,000/200 transaction threshold.
To review the One Big Beautiful Bill in greater detail, click here.
The Social Security Administration has released its W-2 electronic reporting specifications for tax year 2025. Publications EFW2 and EFW2C provide reporting specifications and directions for filing original and corrected electronic W-2 forms with the federal government, and the specifications for tax year 2025 have been released.
Each year, the Social Security Administration adjusts the annual maximum wages subject to Social Security taxes. For tax year 2025, the Social Security base tax maximum has increased from $168,600 to $176,100. The maximum payroll tax for the year has increased from $10,453 to $10,918.
Other than that annual revision, there were no changes to filing specifications or direction. A number of inconsequential editorial changes have been made to both documents.
The Social Security Administration maintains a website providing both documents, available at this link.
On May 20, 2025, Governor Ferguson signed SSB 5314, comprehensive legislation modifying the state’s capital gains tax under RCW 82.87.020. The bill addresses various aspects of the state’s relatively new capital gains tax. Among its provisions, Section 15 establishes new 1099-B reporting requirements for brokers and barter exchanges, effective January 1, 2026.
This marks a significant development for Washington State, which has never previously required the filing of any 1099 information returns, as the state does not impose an income tax. Under the new requirements, brokers and barter exchanges must electronically file copies of IRS Form 1099-B with the Washington Department of Revenue within 90 days of filing with the IRS.
This requirement applies to sales or exchanges of long-term capital assets when the resulting capital gains are allocated to Washington State, and the broker or barter exchange serves as the payor. Under the legislation, capital gains are allocated to Washington by default when any of the following conditions exist: the payee’s last known domicile or address on file is in Washington, the account was opened in Washington, or the payee uses the broker’s physical place of business in Washington.
Payors who fail to comply with these requirements, whether through negligence or fraud, face penalties of $50 per violation. Since ESSB 5167 has already appropriated the necessary funding to the Department of Revenue, the implementation requirement has been satisfied, and the new reporting obligations will move forward.
While the Department has not yet released implementation guidance for brokers and barter exchanges, such instructions on compliance procedures and electronic filing protocols should be forthcoming now that funding has been secured.
To review ESSB 5167 in greater detail, click here.
Connecticut has temporarily suspended its mandatory withholding requirement for lump sum retirement distributions from July 1, 2025, through December 31, 2026. Under HB 7287, which passed on June 23, withholding on lump sum distributions will be voluntary during this period, consistent with other retirement distributions.
The legislation maintains Connecticut’s existing definition of lump sum distributions as payments exceeding $5,000 or more than 50% of the payee’s account balance, whichever is less. Beginning January 1, 2027, mandatory withholding requirements for lump sum distributions will resume unless modified by future legislation. Payees may continue to request voluntary withholding on any retirement distribution by completing Form CT-W-4P.
Georgia recently revised its 2025 Employer’s Withholding Tax Guide, introducing several significant changes to withholding obligations. Key updates include a reduced income tax withholding rate and an extended appeal period. Employers should also review the guide for revised due dates and mailing addresses.
Beginning July 1, 2025, employers and the Georgia Lottery Commission must withhold at a flat rate of 5.19% (down from the current 5.39% flat rate). Withholding must remain at 5.39% through June 30, 2025. Although withholding at 5.19% begins on July 1, 2025, the 5.19% income tax rate will apply retroactively to income earned after January 1, 2025.
Additionally, recent Georgia Code changes extend the tax assessment appeal period from 30 to 45 days.
Georgia’s updated 2025 Employer’s Tax Guide can be found here.
On 8 July, the Council of the European Union adopted the final legal acts paving the way for Bulgaria to join the euro area on 1 January 2026. This decision follows Bulgaria’s successful fulfilment of all economic and legal convergence criteria set out in the Maastricht Treaty.
With this decision, Bulgaria is set to become the 21st member of the eurozone. The Bulgarian lev will be replaced at a fixed conversion rate of 1.95583 lev per EUR 1. This rate correspondences to the current central rate, which has remained unchanged for over a decade.
The transition to the euro was already anticipated by national legislation adopted nearly a year ago. On 7 August 2024, the National Assembly passed the Law on the Introduction of the Euro in the Republic of Bulgaria, which provides the legal framework for the currency changeover. The law includes provisions on tax settlement rules, specifying the declaration and payment currency.
Maryland recently enacted bill HB 352. The legislation provides, effective July 1, 2025, that businesses which use a digital service across multiple states may submit to the vendor a multiple point of use certificate to allocate and pay tax only on the portion of the service used in Maryland.
In the whirlwind of tax policy changes sweeping through Congress, one provision of the recently passed “One Big Beautiful Bill” (OBBB) has quietly slipped through with minimal public scrutiny, despite its potentially massive fiscal impact. The bill increases the reporting threshold for Forms 1099-NEC and 1099-MISC from $600 to $2,000 for payments made after December 31, 2025, with future adjustments tied to inflation. While positioned as regulatory relief for small businesses, this change could cost the federal government billions in revenue annually impacting revenue that is already legally owed under current tax law.
The Numbers Tell the Story
The Internal Revenue Service’s comprehensive Tax Gap reports provide compelling evidence of what happens when income isn’t subject to third-party information reporting. According to the IRS’s Tax Year 2022 estimates:
Income subject to substantial information reporting and withholding: Only 2% is underreported
Income subject to substantial information reporting (but not withholding): 6% is underreported
Income subject to some information reporting: 19% is underreported
Income subject to little or no information reporting: 47% is underreported
These figures represent three decades of consistent findings across multiple IRS studies. The relationship is clear and stark: when taxpayers don’t receive information returns like Forms 1099, they dramatically underreport their income.
The Math Behind the Revenue Loss
To understand the potential fiscal impact, consider that the current $600 threshold captures millions of transactions that would escape reporting under the new $2,000 threshold. Based on IRS data:
The individual income tax underreporting gap was $381 billion annually for Tax Year 2022
Business income (primarily from activities that generate 1099s) accounted for 47% of this gap
Nonfarm proprietor income, much of which is reported via 1099s, had a 31% net misreporting rate
When we extrapolate the 55% underreporting rate for income with little to no information reporting, even a conservative estimate suggests that raising the threshold from $600 to $2,000 could result in billions of dollars in lost tax revenue annually.
The Real-World Impact
The consequences extend beyond abstract fiscal projections. Consider these scenarios:
Scenario 1: The Freelance Consultant A marketing consultant performs $1,800 worth of work for a client. Under current law, no 1099 is required. Under the previous $600 threshold (if it had been implemented), this income would have been reported to the IRS. Statistical evidence suggests there’s a 55% chance this income won’t be properly reported on the consultant’s tax return.
Scenario 2: The Small Business A small business pays various contractors between $600-$1,999 throughout the year. Under the OBBB, these payments escape information reporting entirely, significantly increasing the likelihood of underreporting across multiple income streams.
Why Information Reporting Matters
The effectiveness of information reporting isn’t theoretical—it’s one of the most successful compliance tools in the modern tax system. The IRS has documented that:
Wage and salary income (subject to both withholding and information reporting) has a 99% voluntary compliance rate
Investment income (subject to information reporting only) has a 94% voluntary compliance rate
Business income with little reporting has roughly a 45% voluntary compliance rate
This dramatic difference occurs because information reporting creates a “matching” system where the IRS can automatically detect discrepancies between what’s reported to them and what appears on individual tax returns.
The Inflation Indexing Problem
The OBBB compounds the potential revenue loss by indexing the $2,000 threshold to inflation. This means that over time, an increasing share of business payments will fall below the reporting threshold. Given that inflation averages 2-3% annually, the $2,000 threshold could exceed $2,700 within a decade, further eroding the information reporting system’s effectiveness.
A Balanced Perspective
It’s important to acknowledge the legitimate concerns driving this change. Small businesses do face administrative burdens from issuing numerous 1099 forms, and there are real compliance costs associated with the current system. However, these costs must be weighed against the substantial revenue loss and the erosion of tax system integrity.
The question isn’t whether businesses should receive regulatory relief—it’s whether the chosen approach optimizes the balance between compliance burden and revenue protection. Alternative approaches might include:
Simplified electronic filing for 1099s to reduce administrative burden
Safe harbors for businesses with minimal 1099 activity
Graduated thresholds based on business size
Enhanced penalties for non-compliance to maintain deterrent effect
The Bottom Line
The One Big Beautiful Bill’s changes to tax reporting thresholds represent a significant policy shift likely to reduce federal tax revenue by billions of dollars annually. This isn’t new revenue or higher taxes; it’s revenue that is already legally owed under current tax law. With the federal government facing ongoing fiscal challenges and the national debt exceeding $33 trillion, policies that make it easier to avoid paying legally owed taxes deserve careful scrutiny. The IRS Tax Gap, the difference between taxes owed and taxes collected, currently stands at approximately $700 billion annually.
The data from thirty years of IRS compliance studies provides a clear warning: reducing information reporting requirements will likely result in significantly higher levels of tax underreporting. Policymakers should carefully consider whether the administrative relief provided to businesses justifies the substantial cost to federal revenues. The choice is clear; we can maintain robust information reporting requirements and collect the revenue legally owed, or we can provide regulatory relief while accepting billions in lost revenue.
The Federal Board of Revenue (FBR) of Pakistan has announced, once again, an extension to the mandatory e-invoicing integration deadlines. According to the official notification issued on 20 June 2025, the integration deadlines have been pushed back by one month.
New Implementation Timeline
Under the revised schedule:
Corporate registered persons now have until 1 July 2025 to complete their integration
Non-corporate registered persons have been granted until 1 August 2025
This represents the second extension to the original deadlines established under S.R.O. 709(I)/2025, which initially set 1 May 2025 for corporate entities and 1 June 2025 for non-corporate entities.
Compliance Requirements Remain Unchanged
While the deadlines have been extended, businesses must still:
Integrate their electronic invoicing systems with the FBR’s computerized system
Connect through either a licensed integrator or Pakistan Revenue Automation Limited (PRAL)
Ensure compliance with Rule 150Q of the Sales Tax Rules, 2006
Transmit invoice data securely and in real-time to the FBR
Next Steps for Taxpayers
With the new deadlines approaching, businesses should promptly evaluate their integration readiness and engage with a licensed integrator or PRAL as soon as possible.
For future updates on Pakistan e-invoicing requirements and similar developments in other countries, subscribe to our Regulatory Analysis page.
On 19 June 2025, amendments to certain tax legislation were published in the Hungarian National Gazette. These amendments, passed by the Hungarian Parliament a week earlier, extend the application of the so-called windfall taxes, including the Extra Profit Tax or Supplemental Insurance Premium Tax (EPTIPT), for an additional year. Originally introduced as a temporary measure to address increased fiscal pressure stemming from the war in Ukraine, the EPTIPT was enacted via Government Decree (197/2022) for an initial period of 1.5 years. This period was subsequently extended through 2024, 2025 with new Decrees and now once again extended through 2026 with the published Act.
The newly adopted legislation consolidates the original Decrees and its five subsequent amendments into a formal Act, integrating the provisions for 2025 and 2026 into Act No. 102 of 2012 on Insurance Premium Tax (hereinafter referred to as the IPT Law).
Based on the enacted amendments, the EPTIPT is expected to be phased out by 2027. (The last year is planned to be 2026.) No significant changes have been made to the tax structure, meaning that the current rates and thresholds remain in effect:
A) Non-life insurance policies:
3% on the portion of the tax base up to HUF 48 billion
14% on the portion exceeding HUF 48 billion
B) Life insurance policies:
2% on the portion of the tax base up to HUF 48 billion
6% on the portion exceeding HUF 48 billion
The rules governing prepayments (PP) also remain unchanged. The only notable amendment involves minor adjustments to the calculation of the applicable reduction for EPTIPT, specifically:
a) the growth in the nominal value of government securities has been increased from 30% to 60%, with 60% reduction applicable for the 2026 tax year,
b) the reference period for assessing the increase has been slightly shifted from August-October 2024 to September-November 2025 for the 2026 application, and
c) the maturity threshold for the relevant Hungarian Government Bonds, which are denominated in forints and issued via auction, has been extended from beyond 1 January 2030 to beyond 1 January 2031 for the 2026 period.
Furthermore, the provisions for IPT introduced by Government Decree 52/2024, effective as of April 2024, have been incorporated into the IPT Law. These provisions include:
a) An increase in the IPT threshold for the application of the sliding scale regime from HUF 8 billion to HUF 20 billion.
b) Revisions to the IPT rate brackets, resulting in the following applicable IPT rates:
Ø 25% of the standard IPT rate (10%/15%) for taxable premiums up to HUF 250 million (previously HUF 100 million), resulting in an effective IPT rate of 2.5% / 3.75%.
Ø 50% of the standard IPT rate for taxable premiums between HUF 250 million and HUF 1.75 billion (previously HUF 100 million to HUF 700 million), resulting in an effective IPT rate of 5% / 7.5%.
Ø 100% of the standard IPT rate for taxable premiums exceeding HUF 1.75 billion (previously HUF 700 million), corresponding to the full standard IPT rates of 10% / 15%.
Simultaneously, Government Decrees of 197/2022 and 52/2024 have been repealed. The new rules entered into force on the day following their publication, i.e., 20 June 2025.
On June 18, 2025, the IRS released revised 2025 Instructions for Form 1099-DA (Digital Asset Proceeds from Broker Transactions). The updates provide detailed guidance for brokers electing to use the ‘optional reporting method’ to report aggregate sales of qualifying stablecoins or specified non-fungible tokens (NFTs) to customers.
Brokers are not required to report acquisition dates or basis amounts for covered securities if they use the optional reporting method. For qualifying stablecoins, a separate Form 1099-DA is required to report the aggregate of each type of stablecoin reported to a customer. For specified NFTs, brokers may report all NFT transactions for a customer on a single 1099-DA, except transactions for first sales of a specified NFT by a creator or minter, which must be reported on a separate form.
The updated instructions clarify these requirements for brokers using the optional reporting method:
Complete Box 1a with ‘999999999’ for specified NFTs or the digital token identifier for qualifying stablecoins.
Complete Box 1b (Name for digital asset) with ‘Specified NFTs’ or the name of the stablecoin.
Box 1c (number of units) must contain the aggregate number of specified NFT units or qualifying stablecoin units.
Brokers must report first sales of a specified NFT by a creator or minter on a separate 1099-DA. When reporting first sales of NFTs, Box 1f (proceeds) must be blank; for other NFT sales not attributable to first sales, Box 11c (primary sale proceeds) must be blank.
Box 12a (number of units transferred into custodial account) and Box 12b (transfer-in date) were added to the list of boxes that are not required when using the optional reporting method.
The updated 2025 Instructions for Form 1099-DA can be found here.
On June 16, 2025, Illinois enacted Public Act 104-0006, introducing a series of tax amnesty programs designed to help taxpayers resolve outstanding liabilities while avoiding penalties and interest.
A general tax amnesty program will take place from October 1, 2025, through November 15, 2025. This initiative allows taxpayers to settle outstanding tax liabilities for periods after June 30, 2018, and before July 1, 2024. Penalties and interest will be waived for eligible taxpayers who pay their full tax liability during the amnesty window, and the Illinois Department of Revenue will not pursue civil or criminal charges for taxes covered under the program. However, failure to pay the full amount due will void the amnesty benefits.
A remote retailer amnesty program will be available from August 1, 2026, through October 31, 2026, specifically for remote retailers who owe state or local Retailers’ Occupation Tax on sales made between January 1, 2021, and June 30, 2026. Eligible transactions involve sales of tangible personal property delivered to Illinois addresses by out-of-state (remote) sellers. Taxes will be calculated using a simplified flat rate instead of the standard state and local rates. Penalties and interest will be waived for participating retailers.
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