March 01, 2019
Welcome to the first edition of the RISCPA Member Spotlight!!
In this feature, we will showcase a member or members who have shown leadership and advocacy for the profession and business community, contributed in a special way to their hometown community, or are making a mark in a unique endeavor. RISCPA members deserve to be in the spotlight!
In our debut Member Spotlight, we recognize members Grafton “Cap” Willey, IV and Randy Ditmar in recognition of their government advocacy efforts in recent weeks to correct a tax provision stemming from the 2017 Tax Cuts and Jobs Act (TCJA) that has been hurting local businesses. Cap and Randy outlined a proposal to House leadership to amend the state’s tax code as it relates to pass-through entities, a category which applies to many small businesses in Rhode Island which have lost an important federal tax deduction due to the tax reform law. The new law set a cap on allowable deductions for state and local taxes (SALT) at $10,000, and since the taxes for many pass-through entities are not paid by the entity but through the owner’s own income tax, they are subject to the cap, thus losing out on a full deduction.
As Cap Willey explains: “This legislation allows a pass-through entity to pay the state income tax at the entity level the same as a C-Corporation and deduct it from the federal income tax passed through to the owners. The net benefit is that it allows the pass-through entity to be treated the same as the larger C-Corporations on their income which is only fair.”
Cap and Randy led efforts to appeal to House Majority Leader Joseph Shekarchi to address the issue and this week the Majority Leader proposed a bill based on their proposal that would restore the full deduction and create a tax credit for pass-through entity businesses.
One final note: the restored tax deduction remains revenue neutral to the state and is only a cost to be absorbed by the federal government. It will help our small businesses gain an equal footing to C-Corps which saw larger tax cuts in the federal tax overhaul bill.
The RI Society had also issued a letter of support for this proposal to the Majority Leader and to RIPEC. We greatly appreciate the comprehensive efforts of these members on this important tax issue and salute Cap Willey and Randy Ditmar as our first ever recipients of our Member Spotlight Award!!
Our Member Spotlight feature is a great opportunity to recognize fellow CPAs for awards or other recognition and efforts within their community, taxpayer advocacy and more. Please send info on the member and a short paragraph on the accomplishment to Donna Perry at email@example.com.