On Tuesday, January 26, 2021, the Tax Committee of the Minnesota Senate held a hearing to discuss legislation (S.F. 263) to restore the full SALT deduction for pass-through businesses. If adopted, Minnesota would become the eighth state to enact the SALT Parity reform.
Meissner Tierney Fisher & Nichols President and Shareholder Tom Nichols participated as a witness at the hearing, stating:
“C corporations got pretty beneficial treatment out of the Tax Cuts and Jobs Act…C corporations were entitled to fully deduct all of their state and local income taxes. For pass-through entities, that wasn’t the case…and with the $10,000 cap, state and local income taxes were effectively non-deductible. So, while you had rough parity between C corporations on one hand, and S corporations and partnerships on the other, before the Tax Cuts and Jobs Act, you now have a pretty dramatic difference.”
Tom Nichols was influential in the creation of the SALT Parity legislation enacted in Wisconsin and authored the legal analysis that was influential in convincing the U.S. Treasury Department to greenlight such proposals.
You can listen to the full hearing here.
