Legislation that allows passthrough businesses to opt into a cost-saving tax structure is on its way to the House after swift passage by the Senate last week.
Senate Bill 1170 creates a new, optional tax on passthrough businesses, such as partnerships and S-corps. The intent of the bill is to allow these types of entities to opt into a tax structure that will allow them to fully deduct state and local taxes from their income at the federal level.
Changes in federal tax law limited the amount of state and local taxes that can be deducted from income. SB 1170 will restore the ability for these businesses to fully deduct all state and local taxes resulting in an almost $200 million savings to Michigan businesses.
The bill moved out of committee and off of the Senate floor this week. The House committee plans to take up the bill this week.
For more information on the new passthrough tax, please contact Dan Papineau at email@example.com.