Partnership tax deduction passed by General Assembly

This spring's 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. House Bill 2239 (Currie, D-Chicago; Harmon, D-Oak Park) restores this deduction.  It has passed both chambers today and will be sent to the Governor within 30 days for his signature, amendatory  veto, or veto.