Health Policy Affairs

SIR has joined a letter to congressional leaders asking them to reject a provision in the recently passed House Ways and Means Committee tax bill that would increase taxes on small business medical providers across the country. 
 
The proposal will increase taxes for dentists, physicians and other medical professionals who provide services directly to their patients by removing the ability of these professions to deduct state income tax payments from their federal return. Previously, these professions were able to deduct state-level pass-through entity tax (PTET) payments to reduce their overall tax burden. For reasons unclear to us, the House Ways and Means Committee has singled out certain service-based professions for unfair tax treatment.
 
Many mid-to-high level income provider-owned medical practices will be especially harmed by this new provision as they are also phased out of qualified business income deductions. The effect will be a “double tax” on small medical practices, without the protections enjoyed by other small businesses or corporations.