SALT - The S Corporation Association

Progress on S-Corp SALT Parity Efforts

The House Select Revenue Subcommittee held a hearing today entitled “How Recent Limitations to the SALT Deduction Harm Communities, Schools, First Responders, and Housing Values.” Missing from the list are Main Street Employers, many of whom lost the ability to deduct the State and local taxes they pay on their business income.

That’s because tax reform subjected deductions on state and local taxes (SALT) paid by pass-through business owners to the same $10,000 cap as taxes paid on wages and property. Taxes paid by the business entities themselves, like C corporations, remain fully deductible.

Since most states tax pass-through businesses at the …

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The Legal Case for Pass-Through SALT Parity

Last week, Bloomberg published a report that got our attention. Entitled, “IRS May Knock down New York, Connecticut SALT Workarounds,” the article says the IRS is “likely” to issue regulations that invalidate SALT workarounds.

The reference to New York didn’t surprise us. It’s no secret the IRS is targeting the charitable workaround adopted by New York and other states – they already issued guidance last fall throwing sand in the gears of that one. But the pass-through SALT parity bills passed by Connecticut and Wisconsin are entirely different, both legally and politically.

Why can C corporations deduct all …

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