The issue at a glance
The Senate is considering a sweeping bill that will raise taxes on many regional businesses but maintain deductions for large corporations. The legislative package, known as the “big beautiful bill,” is expected to undergo additional changes before the Senate’s upcoming vote. Explore our advocacy resources below, and urge your senators by June 13 to preserve the existing tax policy for all businesses.
What is the PTET SALT deduction?
The majority of U.S. businesses are structured as pass-through entities (PTEs) — including accountants, pharmacists, dentists, veterinarians and other providers we all rely on. Historically, PTE owners could deduct state and local taxes (SALT) from their federal returns. But the 2017 Tax Cuts and Jobs Act introduced a $10,000 SALT cap on the amount PTEs can deduct. Meanwhile, C-corporations can still deduct all state and local taxes as business expenses.
Many regional business owners were especially hit by this policy, further widening the gap between service-based practices and large corporations. To help alleviate this disparity, 36 states and New York City enacted a pass-through entity tax (PTET) SALT deduction, approved by the IRS, allowing these businesses to pay state income taxes at the entity level.
How you can help
If passed, the bill would eliminate the PTET SALT deductions on many entities considered the backbone of the American economy — unfairly raising taxes for millions of service-based businesses. Contact your senators today to share your concerns about the tax provisions in the “big beautiful bill.” Tell them to support local businesses and economies in your state by retaining the PTET SALT deductions for all businesses. Find contact information for your senators.
Sample language to call or email your representatives
I urge you to oppose provisions included in the reconciliation legislation that unfairly targets the ability of service businesses structured as pass-through entities to deduct their state and local taxes (SALT) from their federal income while providing no such limit to other businesses. This legislation effectively discriminates against particular pass-through businesses by indirectly raising taxes on those entities that are considered the backbone of the American economy. These provisions greatly widen the disparity in treatment between pass-through entities and other kinds of businesses, and I strongly urge you to oppose these provisions of the bill.
PTET resources
AICPA Comment Letter to Senate on the One Big Beautiful Bill Act (May 29)
One Big Beautiful Bill Act PTET SALT deduction: Fact or Fiction? (May 29)
State Pass-Through Entity (PTE) Map (May 299)
House passes budget reconciliation bill with changes to tax provisions (May 22)
Why the PTET SALT deduction is the AICPA’s ‘No. 1 priority’ (May 21)