ASA Strongly Supports the OBBBA’s Tax Reform Measures

ASA, along with the Main Street Partnership, strongly supported the tax reform provisions of the One Big Beautiful Bill Act (OBBBA) as the legislation builds on the foundation laid by the Tax Cuts and Jobs Act and advances a forward-looking, pro-growth tax agenda that supports tens of millions of Main Street enterprises. Critically, it would provide long-overdue certainty to the more than 95 percent of American businesses organized as S corporations, partnerships, and sole proprietorships -- businesses that employ a large majority of the private sector workforce and serve as the economic engine of communities nationwide.

Among the most significant provisions for these businesses are the permanent extension of the Section 199A deduction and the retention of the 37-percent top individual rate. These measures reflect the need for a competitive and equitable tax structure that recognizes the importance of rate parity between pass-through businesses and C corporations, and helps ensure that these employers can continue to invest, hire, and grow.

Section 199A permanence has been our top priority for several years, and it’s encouraging to see lawmakers respond with a serious effort to protect Main Street from a looming tax hike. Similarly, while past drafts called for new limitations on SALT deductibility for pass-throughs, the Senate bill goes a different direction:

We applaud the members of Congress for their commitment to ensuring parity when it comes to the deductibility of state and local taxes (SALT) incurred by pass-through businesses. This preserves their longstanding ability to deduct SALT expenses as an ordinary and necessary cost of doing business. This policy reflects a clear understanding that pass-through businesses should not be treated less favorably than their C corporation counterparts and reinforces the principle of equal treatment under the tax code.