SALT Parity State of Play

Adoption of the Working Families Tax Cuts Act last July was a huge win for Main Street – a win that included locking in $20 billion of annual savings through our SALT Parity efforts. With the SALT cap now permanent, those parity laws enacted in 36 states are more important than ever.

Just as important – making sure the benefits are broad and stay in place.  That means making certain that states and other jurisdictions don’t game the policy, that the laws are working as they should, and that we complete the map.  Here’s the …

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It’s been seven years since the first state enacted our SALT Parity legislation restoring the SALT deduction for pass-through businesses.

Since that time, thirty-five other states have followed suit, the IRS issued Notice 2020-75 in support of the state laws, and Congress considered but rejected several efforts to repeal or otherwise limit the deduction for pass-throughs. (As always, C corporations continue to deduct their SALT without limitation or debate.)

After all that, you’d think the tax community would accept that our SALT Parity laws are in good standing.  You’d be wrong.

The latest example of hand-wringing comes from a recent …

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One BIG Main Street win in the One Big Beautiful Bill (OB3) was what didn’t happen: Congress rejected ill-considered proposals in both the House and Senate drafts to limit pass-through entity (PTET) deductions for state and local taxes (SALT).

That was huge for many reasons, but primarily because the C corporation down the street continues to fully deduct their SALT. In what rational world is Home Depot allowed to deduct its SALT, but your local hardware store is not?

In place of limiting PTET deduction, Congress instead voted to temporarily raise the individual SALT cap from $10,000 to $40,000. What …

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