Episode 78

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Published on:

20th Dec 2023

Navigating State and Local Tax Deductions with Jeff Hoopes and Scott Dyreng from TaxChats

In this episode of the SALTovation podcast, Stacey Roberts and Meredith Smith speak with hosts of the TaxChats podcast, Scott Dyreng, Professor of Accounting at Duke’s Fuqua School of Business, and Jeff Hoopes, Associate Professor at Kenan-Flagler Business School at the University of North Carolina at Chapel Hill. They discuss the $10,000 state and local tax (SALT) deduction cap and explore the impact of the cap on taxpayers, particularly in high-tax states. They discuss various strategies and issues related to SALT, the political dynamics surrounding the cap, potential future changes, and the complexities of filing taxes in multiple states. 



Topics discussed in this episode:

  • The $10,000 state and local tax deduction cap and its impact on taxpayers
  • The cap's effect on business owners with income flowing through multiple states
  • Impact of the cap on taxpayers in high-tax states like California, New York, and New Jersey
  • The potential future of the salt cap and the political dynamics surrounding it
  • Workarounds implemented by some states to mitigate the impact of the cap
  • Implications of state income tax on personal salaries and employment taxes
  • The complexity of filing taxes in multiple states and the potential for double taxation





Quotables

  • “Another part that we haven't mentioned here is also very important is this deduction only exists for people if you itemize your tax itemize on your tax return. So that's like 90% of taxpayers don't itemize their tax return. And it's pretty much just like with income. So the 90% 90% of taxpayers the lower income people the 90% lower. So a lot of people don't itemize at all. This doesn't have any effect. So you're only starting with the 10% richest people. And then from there only the people that like exceed that $10,000.” -Jeff Hoopes [11:05]


  • “It's kind of like letting the business pay the tax at the state level, not having it flow through and then only flowing through the after-tax amount. Whereas in the pre world, I was like flowing through the whole amount and being forced to pay a claim. It was like an individual thing. So it sort of converted it from an individual tax to a business tax.” -Scott Dyreng [21:37]




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Mentioned in this episode:

Advanced Sales and Use Tax Workshop

Take your sales tax to the next level at Advanced Sales and Use Tax Workshop, February 19-21 in Nashville. Diane Yetter and the Sales Tax Institute’s industry-leading faculty provide individualized training, valuable resources, and practical solutions. Expand your network and earn 23 CPE credits. Visit the link in the show notes and use the code SALTOV10 for 10% off. Save your spot now!" https://keap.page/xp141/saltovation-podcast.htm

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About the Podcast

SALTovation: Making Sense of State and Local Tax
Welcome to SALTovation. The SALTovation show is a podcast series featuring the leading voices in state and local tax (SALT). Here we talk about issues, strategies, and planning tools to help you make sense of SALT. Because, in SALT, there is no “one and done.” SALT is a puzzle of ever-changing pieces. Solving that puzzle is our business at SALTovation. Tens of thousands of listeners know they won't get tax talk as usual with the SALTovation team. Our team is known for straight-talk with a flair for fun, providing clarity and opinions that move businesses forward with confidence.

Attorney, CPA, speaker, and writer Judy Vorndran leads the SALTovation team as they go inside business to help deal with the daily operations and long-term strategies of making SALT less “taxing.” Judy has spent more than 25 years advocating for businesses with innovative strategies, renowned knowledge and experience. She has helped guide thousands of taxpayers across the nation and globally through the morass of SALT, freeing them to concentrate on growth. Joining Judy are the wickedly smart members of the SALTovation team, who have seen, worked with and tamed some of the most prickly issues in SALT. They enjoy sharing their stories and knowledge with listeners.

Solving the SALT puzzle doesn’t happen in a vacuum; it takes a community. So, we invite leaders in business and state and local tax to share their stories, challenges and successes on this show. Drop us a line at SALTovation.com if you'd like to join the conversation and tune into our regular series at TaxOps.com.