Legislature Passes Tax Reform

Liz Gullett

Dec 17, 2021

The House and Senate passed legislation aimed at helping small businesses save more on their federal taxes. Federal law allows taxpayers to deduct their state and local taxes (SALT) on their federal returns. The deduction for individuals is limited to $10,000, and the cap applies to small businesses that file taxes through their individual owners. These businesses are treated differently than larger C corporations, which are allowed to claim an unlimited SALT deduction. The bill passed this week would create an optional entry-level tax, which flow-through entities could pay instead of the individual state income tax. Under the new tax, the federal SALT deduction cap would not apply, and small businesses could increase savings on their federal taxes. The bill will be sent to Governor Gretchen Whitmer for her consideration.

Michigan Legislative Consultants is a bipartisan lobbying firm based in Lansing, Michigan. Our team of lobbyists and procurement specialists provide a wide range of services for some of the most respected companies in America. For more on MLC, visit www.mlcmi.com or connect with us on LinkedIn and Twitter.