KPMG article: Proposed new SALT regime and passthroughs
Examination of proposed new SALT regime under H.R. 1 and effects on passthroughs and partnerships
The U.S. House of Representatives on May 22, 2025, passed H.R. 1, the budget reconciliation bill known as the “One Big Beautiful Bill” (OBBB), by a 215-214 vote. The OBBB, as passed by the House, contains a collection of changes to the limitation on the individual deduction for certain state and local taxes (SALT), including changes that would prevent some, but not all, passthrough entity tax (PTET) regimes and other related regimes. As the OBBB moves through the Senate, further changes to the SALT rules appear possible, if not likely, since the political dynamics in the Senate differ significantly from those in the House.
Read a June 2025 article* prepared by KPMG LLP tax professionals that examines key provisions of the OBBB as passed by the House concerning the new SALT regime and provides critical takeaways affecting passthroughs and partnerships that are paying or accruing taxes subject to the new SALT cap.
*This article appears in Tax Notes Federal (June 16, 2025) and is provided with permission.