California Bills Extend SALT Cap Workaround and Ease Payments

California would extend its elective tax that gets around the $10,000 federal cap on state and local tax deductions through 2027 and make it easier for taxpayers to use the mechanism under two bills that advanced on Wednesday.

The bills apply to California’s SALT cap workaround, which allows pass-through businesses like partnerships and S corporations to elect to pay a 9.3% state tax on their income. Members of those entities then claim a credit on their personal income taxes equal to their share of the firm’s tax payment.

The bills passed the state Senate Revenue and Taxation Committee with ...