Delaware House Bill 489 (Prior Session Legislation)

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Spectrum: Bipartisan Bill
Status: Introduced on June 28 2022 - 25% progression, died in committee
Action: 2022-06-28 - Introduced and Assigned to Economic Development/Banking/Insurance & Commerce Committee in House
Pending: House Economic Development/Banking/Insurance & Commerce Committee
Text: Latest bill text (Draft #1) [HTML]

This legislation imposes a new, elective entity-level tax on the income of partnerships and S-corporations, each of which are commonly referred to as pass-through entities for tax purposes. Prior to this legislation, the income of a pass-through entity was subject to the personal income tax of the owner in proportion to the ownership interest in the entity. In 2017, federal tax law reduced from an unlimited amount to $10,000 the amount an individual can claim as an itemized deduction for state and local taxes paid on an individual taxpayers annual tax return. State and local income taxes are commonly referenced to for tax purposes as SALT taxes. This 2017 federal limitation on the itemized deduction for SALT taxes included state taxes paid on the income of a pass-through entity and, as a result, materially limited the federal tax benefit of state income taxes paid personally by an owner on the taxable income of a pass-through entity.

An Act To Amend Title 30 Of The Delaware Code Relating To Taxation Of Pass-through Entities.

Rep. William Bush [D]

Sen. Bruce Ennis [D]

Rep. Michael Smith [R]

Rep. Lyndon Yearick [R]

Date	Chamber	Action
2022-06-28		Introduced and Assigned to Economic Development/Banking/Insurance & Commerce Committee in House

Type	Source
Summary	https://legis.delaware.gov/BillDetail?LegislationId=129844
Text	https://legis.delaware.gov/json/BillDetail/GenerateHtmlDocument?legislationId=129844&legislationTypeId=1&docTypeId=2&legislationName=HB489