Repeal of partnership tax change
Last week in veto session the Senate repealed a part of a the budget bill enacted into law in June. The budget bill, Public Act 96-45, changed tax policy effective for tax years ending Dec. 31, 2009 by limiting partnerships’ deduction to “guaranteed payments” instead of “reasonable compensation” for the Personal Property Replacement Tax. That change generally limits the deduction to income partners because equity partners’ income is based on their share of the distributable income of the partnership. Last week the Senate passed 57-0-0 a repeal of this part of PA 96-45 in House Bill 2239. The House will consider the bill the week of Oct. 26th.