How do state pass-through entity taxes work? Q.How do state pass-through entity taxes work? A.A major revenue raiser from the 2017 Tax Cuts and Jobs Act was the $10,000 cap on the state and local tax (SALT) deduction. Because the cap applies to personal income taxes but not business income taxes, many states have enacted entity-level taxes on pass-through businesses, which can deduct that tax fully on their federal returns. Read more about How do state pass-through entity taxes work?
How do state individual income taxes conform with federal income taxes? Q.How do state individual income taxes conform with federal income taxes? A.States use federal tax laws in their own state tax codes to make rules and definitions simpler for both taxpayers and tax administrators. However, “conformity” means federal tax changes can also affect state tax laws. Read more about How do state individual income taxes conform with federal income taxes?
How do state and local severance taxes work? Q.How do state and local severance taxes work? A.Severance taxes are taxes on the extraction of natural resources such as oil and natural gas. State and local governments collected a combined $11.8 billion in revenue from severance taxes in 2021. Read more about How do state and local severance taxes work?