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Newest SALT Cap Workaround May Come From Alabama Lawmakers

Feb. 19, 2020, 6:48 PM

A legislative task force is pushing Alabama to become the next state to offer owners of pass-through businesses a method to circumvent the 2017 federal tax law’s limit on state and local deductions.

The group is urging Alabama legislators to consider a workaround similar to what a handful of other states—Connecticut, Louisiana, New Jersey, Oklahoma, Rhode Island, and Wisconsin—have enacted. Such a provision would allow owners of limited liability companies, S corporations, and other pass-through entities to pay their state income taxes at the business level.

That would keep the tax, and the income, from flowing to the individual owners ...