Latest from the Blog
Main Street Supports New Taxpayer Protection Legislation
The Main Street Employers Coalition joined with over 40 national organizations in support of H.R. 23, the Family and Small Business Taxpayer Protection Act. The bill would rescind billions in questionable funding enacted in 2022 by the previous congress which expanded the Internal Revenue Service’s (IRS) audit enforcement activities, while doing little to improve woefully inadequate taxpayer service. To access a copy of the letter, please click here. Read More
S-CORP Podcast on Heightened Interest in the Employee Retention Credit
What’s the real story behind all these firms offering a big payday through the Employee Retention Credit? The S Corporation Association’s latest podcast, featuring veteran tax practitioner Lynn Mucenski-Keck, has all the answers. The episode is available at the link below, or through your favorite podcast app: Talking Taxes in a Truck Episode 24: “I’m Worried About Everything” Read More
ENABLERS Act Opposed by 75+ Trade Associations
Today, the Main Street Employers Coalition joined with dozens of its trade association allies to oppose the ENABLERS Act, legislation that would put some 30 million law-abiding small businesses in the crosshairs of federal law enforcement. At its core, the ENABLERS Act relies on criminals, including the lawyers and other financial professionals who assist them, to voluntarily provide an accurate picture of their activities to Treasury. As the letter... Read More
Main Street Asks Congress to Reject the Inflation Reduction Act
Today, the Main Street Employers Coalition joined with more than 70 trade associations in opposing the Inflation Reduction Act. A letter sent to lawmakers highlighted the various tax provisions that are harmful to the small and family-owned business community, and points out that now is simply not the time to be raising taxes on these employers. The letter, which can be accessed by clicking here, reads: The undersigned organizations... Read More
MSEC: The Inflation Reduction Act Fails to Address the Challenges Facing Main Street
“The Main Street Employers Coalition – comprised of national trade groups representing individually and family-owned businesses employing millions of Americans in every state – believes the “Inflation Reduction Act” would fail to address the major challenges confronting Main Street today: high inflation, a slow economy, and a tight labor market. “Recent NFIB member surveys make clear that inflation is the number one concern for Main Street businesses right now.... Read More
Main Street Unites Against Senate Democrats’ Tax Rate Hike
The Main Street Employers Coalition joined with more than 190 business organizations, representing millions of Main Street businesses and tens of millions of American workers, to oppose Senate Democrats effort to raise tax rates on individually and family-owned businesses. The latest proposal includes a 3.8 percent tax rate hike on the active income of 1 million businesses struggling with high inflation and looming recession fears. The letter makes it... Read More
Statement from the MSEC Opposing Inflationary Tax Hikes on Individually & Family Owned Businesses
Main Street Opposes Inflationary Tax Hikes on Individually & Family-Owned Businesses “It’s the kind of thing you’d do to start a recession, not prevent one.” WASHINGTON, D.C. (July 11, 2022) – The Main Street Employers Coalition—comprised of national trade groups representing individually and family-owned businesses employing millions of Americans in every state and district—released the following statement on a Democratic plan to raise tax rates on individually and family-owned businesses: “We... Read More
Inflation, Taxes, and Family Businesses – What do Voters Really Think?
Our allies at the S Corporation Association recently held a webinar to highlight the results of its new national survey. David Winston, whose research and polling firm conducted the survey, was on hand to break down the results and explain how voters feel about inflation, the Build Back Better Act, the current state of the economy, and their potential impact on November’s elections. As David made clear, the polling... Read More
Main Street Speaks Up for Permanent Tax Relief Legislation
Today over a hundred business groups released a joint letter in support of the Main Street Tax Certainty Act of 2019. Sponsored by Representatives Jason Smith (MO), Henry Cuellar (TX) and Senator Steve Daines (MT), this bipartisan legislation would make permanent the 20-percent pass-through deduction enacted as part of tax reform. All Main Street businesses are at risk of losing the deduction when it is scheduled to expire in 2026.
In addition to Parity for Main Street coalition members, the groups include the U.S. Chamber of Commerce, the National Federation of Independent Businesses, and the American Farm Bureau.
Raising taxes on Main Street was not the intent of Congress when they enacted tax reform, and it shouldn’t be our policy now. To avoid that bad outcome, Congress needs to make Section 199A permanent. As the support expressed by such a broad cross section of the American business community attests, the economic benefits of providing certainty to Main Street businesses would also be widespread.
Also posted today was a new “whiteboard” video designed by the Parity for Main Street Employer coalition to illustrate the impact and challenges from tax reform for pass-through businesses.
PMSE Releases New Legal Anaylsis Supporting SALT Parity for Pass-Through Businesses
Analysis Paves Way for Other States to Act
The Parity for Main Street Employers coalition of national trade groups today released a new analysis by the Wisconsin-based law firm Meissner Tierney Fisher & Nichols highlighting the legal basis for state efforts to preserve the federal deduction for state and local taxes (SALT) for employers organized as pass-throughs.
To date, two states (Wisconsin and Connecticut) have adopted new laws that would effectively restore the federal deduction for SALT paid by businesses organized as S corporations and partnerships, while two other states (Arkansas and Oklahoma) are actively considering similar bills.
Recent news stories have cast doubt on these efforts by raising the specter of possible action by the IRS to invalidate the new laws. At issue is whether taxes paid by pass-through entities are subject to the new $10,000 deduction cap that applies to individual taxpayers.
The analysis released today addresses these concerns by making a strong legal case for the deductibility of the new entity-level tax enacted in Wisconsin. It summarizes:
State income taxes paid by S corporations and partnerships, limited liability companies and other entities… should not be subject to the new $10,000 state tax deduction limitation under section 164(b)(6) of the Internal Revenue Code…. The Internal Revenue Service (the “Service”) has consistently held that income and other taxes imposed upon and paid by pass-through entities are simply subtracted in calculating nonseparately computed income at the entity level, and are not separately passed through or incorporated into the various provisions and calculations applicable to itemized deductions at the individual level, such as the standard deduction, alternative minimum tax and the Pease reduction. In discussing the final provisions of the Tax Cuts and Jobs Act, the Conference Committee Report explicitly reiterated and relied upon this principle in describing the scope of new section 164(b)(6) of the Code.
While the analysis focuses on the new Wisconsin law, its findings are relevant to Connecticut and other states considering similar legislation.
PMSE Statement on Final Treasury Pass-Through Deduction Regulations
Chris Smith, PMSE Executive Director
“A Section 199A deduction that applies broadly to Main Street Employers organized as passthroughs is essential to maintain parity with C corporations and the new 21-percent rate. While the final rules provide some additional clarity, the Treasury chose not to adopt recommendations of the Main Street community on important issues, including aggregation and de minimis rules.”
“The economic response to tax reform has been relatively muted in part because the tax relief targeted at pass-through businesses – who employ the majority of private sector workers — is complicated, limited, and temporary. This was a missed opportunity to simplify and broaden that relief.”
“To maximize tax reform’s impact, 199A should be amended to be broader, simpler, and permanent. We stand ready to work with Congress to provide the tax relief that Main Street employers and workers deserve.”
Whiteboard Video on Challenges Faced by Main Street Businesses
PMSE Statement on Treasury 199A Regulations
The Parity for Main Street Employers Coalition welcomes Treasury’s guidance applying the new 20% tax deduction to thousands of U.S. businesses organized as pass-throughs—the S-corps, sole proprietorships, and partnerships that comprise 95% of all businesses and who employ the majority of American workers.
Read the full statement by clicking here.
EY Study Shows Why Pass-Through Deduction Should Be Broad, Permanent
Click here for the full study.
PMSE Comment Letter on New York State SALT Fix
The Parity for Main Street Employers coalition–representing more than one hundred national business groups and millions of Main Street employers–strongly supports efforts across the states to restore the ability of employers organized as pass-through businesses to deduct their State and Local income taxes (SALT) on their federal tax returns.
Click here to read more.
Main Street Employers on Tax Overhaul
The Parity for Main Street Employers (PMSE) coalition released a new survey highlighting the pass-through business community’s initial reaction to the tax Cuts and Jobs Act (TCJA). Early results indicate that the tax relief promised to non-corporate employers is in danger absent clear guidance from IRS and Treasury. Key results include…
Click here to read more.
Business Community Letter on Aggregation under 199A
As the Treasury Department and Internal Revenue Service drafts rules necessary to implement HR 1, the undersigned organizations request that you use your regulatory authority to adopt a reasonable method of calculating the new 20 percent pass-through deduction to ensure Main Street businesses are not penalized based on how they are organized for business purposes…
Read more here.
Main Street Employers Group Launches Tax Reform Implementation Effort
Today the Parity for Main Street Employers (PMSE) coalition, comprised of trade groups representing American Main Street businesses, named Chris Smith as its new Executive Director. Smith is a Washington public affairs veteran and a former Chief of Staff for both the U.S. Treasury Department and the House Ways and Means Committee…
Read more by clicking here.