As part of the federal Tax Cuts and Jobs Act of 2017, individuals are limited in how much state and local tax (SALT) they can deduct on their federal return. Business owners who operate in Michigan as S-Corps, LLCs, or other passthroughs pay tax at the individual level, magnifying the negative effects of the SALT deduction limitation.
The Chamber is now exploring the creation of an optional tax on passthroughs accompanied with a credit on their individual tax return to allow business owners to shift their liability from the individual level to the entity level. Taxes on a business entity are fully deductible as a business expense. This exists for corporations already.
For more information, contact Dan Papineau at email@example.com.