ROCKFORD, Ill. – With many businesses struggling due to the economic fallout of the COVID-19 pandemic, state Rep. Dave Vella, D-Rockford, is backing legislation to provide relief to companies by allowing them to receive a full State and Local Tax (SALT) deduction, rather than the deduction being capped at $10,000.
“With so many businesses hurting right now, the federal government capping the SALT deduction has prevented businesses from getting relief that they desperate need,” said Vella. “Businesses should not be double-taxed, and this bill will help businesses get around the SALT cap and help them maximize their much-needed tax deductions.”
In 2017, the federal government created a $10,000 cap on the SALT deduction, which allows those that pay various types of state and local taxes to deduct them from their federal income tax to avoid double taxation, for individuals. While the cap does not apply to most businesses, there are some that are structured in a way that makes the SALT cap apply to them. To ensure that those businesses aren’t being hampered by the SALT cap, Vella is co-sponsoring Senate Bill 2531, a bipartisan measure which allows certain businesses to be taxed in a way that circumnavigates the SALT cap.
Since entering the General Assembly earlier this year, Vella has supported a number of pro-business bills. He introduced legislation creating state and local tax credits for small businesses that create jobs in Illinois. He has also introduced and supported a number of bills aimed at helping veteran-owned businesses.
“With the many benefits that businesses provide the communities they serve, it is essential that we secure as many resources as possible to help them thrive,” said Vella. “As a small business owner, I know how important it is to maximize savings. I will continue to work on legislation getting relief for small businesses as we recover from this pandemic and beyond.”