Bill proposes rolling back LLC tax

"The bill sponsored by a group of Republican and Democratic Senate and House members would repeal an extension of the 5 percent interest and dividends tax that passed last summer. The change was made to add $30 million in state revenues as a budget-balancing move.

Senate Bill 497 ends the LLC tax provisions. It also uses federal tax code to define "reasonable compensation," the pay a business owner can take from profits before the business profits tax (BPT) is assessed. It also removes almost all limits on what business owners can take from their business as pay without fear of state taxation.

One member of the Senate Ways and Means Committee said it appears the bill allows limitless compensation."

-Union Leader