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By: Adriann Murawski, Policy Representative State & Local Government, NAR
Of particular significance to state REALTOR® associations are two deductions that will impact member businesses, the 179 and new 199A deductions which were modified by the Tax Cuts and Jobs Act of 2017. While several areas of federal tax laws will impact real estate, state tax laws will likely need to be updated as states will conform or deviate from the new federal tax laws. The tax treatment of business deductions may have an impact on state revenues. The Section 179 deduction provides an immediate write off for qualifying equipment or software purchased during the qualifying year. The new Section 199A deduction is for qualified business income which will allow up to a 20 percent deduction from certain net business income earned by sole proprietors, such as independent contractors, as well as pass-through businesses, including partnerships, limited liability companies (LLCs), and corporations. These two provisions are particularly susceptible to political negotiating at the state level. NAR will continue to provide resources on state tax reform measures. Learn more here: http://tinyurl.com/ybmxpqob
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