Daily Tax Report ®

Pass-Through Tax Becoming the Latest SALT Cap Workaround Trend

May 14, 2020, 2:00 PM

The growing popularity of a business tax payment option has given new hope to the states that oppose a federal limit on state and local deductions.

Maryland last week became the seventh state to give members of pass-through businesses the option of paying income taxes at the entity level instead of on their personal income taxes. And Minnesota is exploring it as well.

The approach isn’t brand new, but it appears to be a viable workaround for states trying to skirt a measure of the 2017 tax law that capped individuals’ federal deduction for state and local taxes at $10,000....

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