53 CPA societies back AICPA in PTET SALT deduction effort

Eliminating the state and local tax deduction for service-based passthrough entities would “result in a tax increase for accountants throughout the country,” according to a letter addressed to leaders of the Senate Finance Committee by the AICPA and CPA societies from 53 states and jurisdictions.

The Senate is considering the House-approved budget bill, H.R. 1, known as the One Big Beautiful Bill Act. The AICPA has expressed repeated opposition to several aspects of the bill, most notably the limitation of the passthrough entity tax/state and local tax (PTET SALT) deduction for specified service trades or businesses (SSTBs), including accounting firms.

“At a time in which tax reform is focused on job creation and economic growth, this will have the opposite impact,” said the letter, dated Friday and addressed to Sen. Mike Crapo, R-Idaho, chairman of the Senate Finance Committee, and Sen. Ron Wyden, D-Oregon, the committee’s ranking member. “In fact, an analysis by the Tax Foundation shows that the House bill language eliminating the deduction for SSTBs will reduce GDP by 0.2 percent.”

In the letter, the AICPA and CPA societies said that accountants would be “worse off” than they were with the passage of the Tax Cuts and Jobs Act in 2017.

“The [PTET] deduction of state and local taxes has mostly provided for parity between corporations and pass-throughs,” the letter said. “The House bill targets professionals simply based upon their chosen occupation. We believe that this is discriminatory and unfair.”

Last month, Melanie Lauridsen, the AICPA’s vice president–Tax Policy & Advocacy, was a guest on the JofA podcast and discussed the AICPA’s opposition to the One Big Beautiful Bill’s PTET provisions.

“It goes against a lot of our principles and the guiding principles of good tax policy. It goes against neutrality, it goes against fairness, it goes against simplicity, it goes against certainty, it goes against transparency. There’s a lot of reasons why this is just simply quite wrong,” Lauridsen said.

“I just want to reassure the membership that we are making the biggest push that we can,” Lauridsen said.

Additional resources:

• 2025 AICPA tax reform advocacy homepage.
• State and local tax advocacy resources.
• JofA podcast episode about the PTET SALT deduction being the AICPA’s “No. 1 priority.”

— To comment on this article or to suggest an idea for another article, contact Neil Amato at Neil.Amato@aicpa-cima.com.