Washington – U.S. Rep. John Katko (NY-24) today led an effort alongside Republicans from New York State’s Congressional Delegation urging Governor Cuomo to take advantage of forthcoming tax regulations from the Internal Revenue Service (IRS) and provide state and local tax (SALT) relief to local small businesses. Rep. Katko was joined by U.S. Reps. Lee Zeldin (NY-1), Elise M. Stefanik (NY-21), Tom Reed (NY-23), and Chris Jacobs (NY-27) in this effort.
Last month, the IRS announced forthcoming regulations that would allow many pass-through businesses to claim SALT tax deductions beyond the current $10,000 federal cap. Many states nationwide, including New Jersey and Connecticut, have already implemented measures that would allow eligible businesses to claim this relief. With small businesses in Central New York and across the state facing unprecedented financial strains as a result of the pandemic, Rep. Katko and his colleagues are urging Governor Cuomo to oversee the implementation of measures that allow small businesses to benefit from these new IRS regulations.
“In Central New York, local employers are facing unprecedented challenges that threaten their ability to keep their doors open,” said Rep. Katko. “With this in mind, I am proud to lead my colleagues from New York’s Congressional Delegation in urging Governor Cuomo to take advantage of these forthcoming SALT regulations from the IRS and provide substantive tax relief to many small businesses. Across all levels of government, we must take immediate action to support our local business community and their workers.”
Rep. Katko has long worked to provide SALT relief to families and businesses across Central New York. Last year, he was one of five Republicans to vote in favor of a measure that would lift the SALT cap, and has advocated for Congressional Leaders to include SALT relief in COVID-19 relief legislation.
The full text of the letter can be found below:
Dear Governor Cuomo,
As communities across New York State grapple with the sustained public health and economic impacts of the Coronavirus Disease 2019 (COVID-19) pandemic, we write to express strong support for substantive measures to support New York’s small businesses and their workers. Specifically, we respectfully request immediate action to provide state and local tax (SALT) relief to small businesses across New York State and ensure their ability to take advantage of recent guidance issued by the Internal Revenue Service (IRS).
On November 9, 2020, the IRS issued Notice 2020-75, which announced forthcoming regulations that will allow certain pass-through businesses to claim a deduction against their state and local income taxes for the purposes of calculating the businesses’ non-separable tax income or loss in a given year. This guidance has the potential to significantly reduce the tax burden for many S- corporations and partnerships that currently pay taxes on business income at the individual level and are therefore subject to the $10,000 federal cap on SALT deductions. As a result, this guidance will provide significant relief to millions of Americans businesses that are facing unprecedented financial strains as a result of the COVID-19 pandemic.
With many states having already enacted legislation that will allow businesses to take advantage of these forthcoming IRS regulations, it is critical that New York State follow suit immediately. For this reason, we ask that you oversee the expeditious enactment and implementation of measures that will extend this SALT relief to pass-through businesses statewide. For our constituents, this relief would represent a critical investment in our small businesses, their workers, and our economic recovery.
Thank you for your time and attention to this request. We look forward to your response.