Budget Amendment ID: FY2021-S4-87-R1

Redraft OTH 87

SALT Deduction Cap

Messrs. Collins, Moore and Tarr moved that the proposed new text be amended in section 2, by inserting after Section 54 the following section:-

"SECTION 54A. Notwithstanding any general or special law to the contrary, the department of revenue shall analyze the administrative and revenue impacts of implementing either an elective or mandatory entity-level tax on non-corporate businesses, coupled with a refundable tax credit equal to the distributive share of the entity-level tax for each owner or member, for the purposes of allowing such non-corporate business owners or members to avoid the limitation on the deduction for state and local taxes under section 11042 of the federal Tax Cuts and Jobs Act, P.L. 115-97. The analysis shall include, but not be limited to: (i) a review of entity-level taxes on non-corporate businesses, and corresponding refundable tax credits, in other states implemented for such purpose; (ii) a distributional analysis of which taxpayers would benefit from an entity-level tax and corresponding refundable tax credit; (iii) an assessment of administrative challenges related to the implementation of such entity-level tax and refundable tax credit; (iv) an estimate of the revenue impact, if any, of such entity-level tax and refundable tax credit; and (v) a description of any legislation that would be necessary to carry into effect the entity-level tax and refundable tax credit.

The department of revenue shall submit a report its findings to the clerks of the senate and house of representatives, the joint committee on revenue and the senate and house committees on ways and means not later than March 1, 2021."