What some state CPA leaders are saying about PTET SALT deduction

Some state CPA society leaders are continuing to speak out against the proposal to eliminate the state and local tax deduction for service-based passthrough entities, which they say would be detrimental to accountants.

The House-approved budget bill, H.R. 1, known as the One Big Beautiful Bill Act, which the Senate is considering, includes a limitation of the passthrough entity tax/state and local tax (PTET SALT) deduction for specified service trades or businesses (SSTBs), including accounting firms.

The AICPA and CPA societies from 53 states and jurisdictions jointly wrote to leaders of the Senate Finance Committee last week detailing their objections to the PTET deduction provisions.

Now, five state society leaders have commented further, according to an AICPA news release distributed Thursday:

Ron Gitz, CEO, Society of Louisiana CPAs: “Professional services in Louisiana such as lawyers, accountants and pharmacists rely on the PTET SALT deduction to allow them to operate their businesses, create jobs, and support our local economies. Raising taxes on businesses such as these by eliminating the ability to deduct SALT will be a devastating blow to the local business community and discourage investment in our state. The Society of Louisiana CPAs has been actively advocating for the preservation of the PTET deduction for service-based businesses, and we urge lawmakers to prioritize and protect these essential businesses.”

Tammy Hofstede, president and CEO, Wisconsin Institute of CPAs: “There are thousands of Wisconsin businesses that rely on the PTET SALT deduction to benefit from an otherwise limited deduction. Eliminating the opportunity to take this deduction would lead to higher tax liabilities, harming not only those businesses but also the clients and customers those businesses serve and, ultimately, Wisconsin’s economy.”

Danielle Hologram, president and CEO, Kansas Society of CPAs: “In 2022, Kansas recognized the value of the PTET deduction for our local businesses and economy and enacted PTET legislation, providing relief to pass-through entities. Targeting specified service trades or businesses by eliminating the ability to deduct SALT would cripple many local businesses throughout the state and cause great harm to many communities.”

Kelly Puryear, chair, North Carolina Association of CPAs: “Eliminating the PTET SALT deduction for service-based businesses threatens the backbone of North Carolina’s economy. This change could drive up tax bills, push businesses out of state, reduce wages, cost jobs, and weaken our communities.”

Jodi Ann Ray, president and CEO, Texas Society of CPAs: “Eliminating the pass-through entity tax deduction for specified service businesses unfairly penalizes small businesses and professionals including CPAs and accounting professionals who are vital to our local economies. This change undermines tax parity, disproportionately burdens small and midsized firms, and sends the wrong message at a time when fair, pro-growth tax policy is needed most.”

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