According to Journal of Accountancy, the AICPA and 53 CPA societies are urging the Senate to reject a provision in the House’s One Big Beautiful Bill Act that would limit the pass-through entity tax (PTET) deduction for specified service trades or businesses (SSTBs), including accounting firms. 

In a June 6 letter to Senate Finance Committee leaders Mike Crapo and Ron Wyden, the coalition argued that eliminating the state and local tax (SALT) deduction for service-based pass-throughs would increase taxes for many professionals including accountants and doctors, etc. The letter warned that the change could undermine economic growth and job creation, citing a Tax Foundation analysis estimating a 0.2 percent drop in GDP if the current House language is enacted. 

“The [PTET] deduction of state and local taxes has mostly provided for parity between corporations and pass-throughs,” the letter said. “The House bill targets professionals simply based upon their chosen occupation.”

The coalition warned that "if this provision is signed into law, CPAs across the country will be worse off than they were with the passage of the Tax Cuts and Jobs Act in 2017.  The House-passed One Big Beautiful Bill Act does not provide simplicity nor fairness to millions of pass-through businesses that are job creators in our local towns and cities."

It also noted that if tax reform in the Senate is considered, "we urge you to retain the current ability for pass-throughs to deduct entity-level state and local taxes."

The AICPA has been vocal about its opposition to the provision. In a recent Journal of Accountancy podcast, Melanie Lauridsen, the AICPA’s vice president of Tax Policy & Advocacy, said the bill conflicts with principles of sound tax policy, including fairness, neutrality, and certainty. 

This marks the latest in a series of efforts by the AICPA to mobilize CPAs and lawmakers ahead of Senate debate on the sweeping budget bill, which passed the House in May. Lauridsen emphasized that advocacy efforts will continue, saying, “I just want to reassure the membership that we are making the biggest push that we can.”