FOR IMMEDIATE RELEASE    

Contact:  Karen Moody

601-856-4244

kmoody@ms-cpa.org        

Mississippi Society of CPAs Expresses Concern Over Proposed Changes to PTET SALT Deduction in House Budget Reconciliation Bill

Washington, D.C. (May 21, 2025) -- Following the release of the budget reconciliation bill by the House Ways and Means Committee, MSCPA expressed strong concerns over the discontinuation of the state and local tax (SALT) pass-through entity tax (PTET) deduction used by specified service trades and businesses (SSTBs) across the country.  The proposed provision in the bill would have a detrimental impact on pass-through entities, which make up the vast majority of businesses.  

“The budget reconciliation bill proposal to unfairly exclude SSTBs from deducting state and local income taxes at the partnership level is a blow to businesses everywhere,”  said Karen Moody, President/CEO.”  “The targeting of SSTBs--including pharmacists, accountants, doctors, dentists, and lawyers--would indirectly increase taxes on millions of service-based businesses and expand the disparity in how the tax code treats C corporations versus pass-through entities.  MSCPA opposes this provision of the legislation and urges Congress to allow pass-throughs to retain the ability to deduct the entity’s state and local taxes at the federal level.”

The budget reconciliation bill proposed a number of provisions that MSCPA and the American Institute of CPAs (AICPA) have long supported; however, the PTET deduction has been a lifeline to millions of businesses impacted by the SALT cap implemented in the Tax Cuts and Jobs Act (TCJA).  The bill targets service providers who were already substantially limited under the SSTB rules for the qualified business income (QBI) deduction.

Eliminating this deduction hurts millions of American job creators in order to provide corporations with extended benefits, and MSCPA will continue to work closely with our clients and our colleagues at the AICPA to urge Congress to retain the PTET SALT deduction.