Legislation Introduced to Extend Pass-Through Deduction

Representatives Lloyd Smucker (R-PA) and Henry Cuellar (D-TX) have introduced the Main Street Tax Certainty Act (H.R. 4721) in the U.S. House of Representatives to make permanent the 20% pass-through deduction. It joins companion legislation (S. 1706) introduced earlier this year by Sen. Steve Daines (R-MT)

ICSC strongly supports efforts to make this provision permanent before it expires at the end of 2025. 

Please click here to ask your members of Congress to cosponsor the Main Street Tax Certainty Act.

The 20% pass-through deduction was enacted in the 2017 tax reform law to provide greater parity between the tax rate paid by so called “pass-through” business and those paid by corporations, which was lowered to 21%.

The “pass-through” term comes from the fact that the income of these businesses is passed through directly to their owners’ individual tax returns, rather than being taxed at the corporate level and again when received as a dividend.

Most commercial real estate properties are held in some type of pass-through entity, which include partnerships, LLCs, and real estate investment trusts (REITs), among others. Real estate brokerages, architectural and engineering firms, property owners and developers, and most small business can utilize the deduction. 

For more information, contact Phillips Hinch at phinch@icsc.com.