Bruce Ely Quoted in Tax Notes State on Proposed SALT Cap Workaround

Bradley attorney Bruce Ely was featured in Tax Notes State discussing the Alabama Department of Revenue’s proposed rule implementing the state’s new elective “SALT cap workaround” using pass-through entities.

Ely helped draft the statute and thinks “the proposed rule is helpful to practitioners although most of it simply restates informal guidance the [Alabama DOR] issued a few months ago regarding how to calculate estimated tax liabilities under the new [passthrough entity] tax regime."

However, Ely said the proposed rule doesn’t include the same level of detail that was included in the April guidance on how the previous year’s tax safe harbor works. He said he plans to file comments that mention the need to incorporate the remainder of the explanation from the ADOR’s informal guidance into the final rule.

The statute was drafted “so the merits of the election can be revisited by the owners and their tax advisors each year or every few years, and the election is made in hindsight,” Ely said. “That gives a lot of flexibility here, we hope.”

The original article, “Alabama DOR Proposes Rule for SALT Cap Workaround,” appeared in Tax Notes State on September 8, 2021. (login required)