Are you a passthrough business owner, having to pay more than $10,000 in state and local taxes? If so, you need to know about this proposed legislation.
Senate Bill 1170 was introduced last week by Senator Hildenbrand and creates a new tax on businesses organized as passthroughs or businesses organized as anything other than a “C” Corporation. As the result of this legislation, businesses across the state will save more than $250 million.
The Michigan Chamber supports this legislation and will be pressing the legislature to act quickly on its passage.
Background: This optional tax comes on the heels of federal tax reform and is meant to allow business owners the ability to fully deduct all state and local taxes on their federal return. Part of the federal tax reform passed by congress and signed by President Trump at the end of 2017, was a provision that limited the amount of state and local taxes that can be deducted at $10,000.
The new passthrough tax will be accompanied by a credit that will be applied to the personal income tax liability of an owner to avoid double taxation.
For more information on SB 1170 please contact Dan Papineau at email@example.com.