Limit Corporate Deductions for State and Local Taxes to $10,000

Summary: Under current law, C corporations subject to the federal corporate income tax may deduct all state and local income, property, and/or sales taxes from their federal taxable income. By contrast, individual taxpayers are limited to a state and local tax (SALT) deduction of $10,000.

This proposal would extend the $10,000 limitation to corporations’ state and local tax (C-SALT) deductions. We provide estimates for a narrow proposal that extends the limitation to corporate income tax only, and a broad proposal that extends the limitation to corporate income and property taxes.

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Note: This estimate supersedes a previous estimate originally published on January 13, 2025.

Table 1. Estimated Revenue Effects, Fiscal Years 2026-2035

Change in revenues from TCJA extension baseline, billions of dollars

	2026	2027	2028	2029	2030	2031	2032	2033	2034	2035	Total, 2026 - 2035
Corporate Income Tax	22.8	24.2	25.4	26.3	28.5	30.3	31.1	32.6	33.6	35.1	290
Corporate Income + Property Tax	61.9	66.1	69	72.9	77.7	82.8	85	89.3	91.7	96.1	793

Note: Estimate is relative to a Tax Cuts and Jobs Act (TCJA) extension baseline in which all expiring provisions of the TCJA are made permanent after 2025.