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ADA praises Senate for newly-proposed S-corp tax rate

  • ADA News
Washington — The Senate Finance Committee on Nov. 14 released an updated tax reform proposal that included changes to the S corporation tax rate that the ADA believes are favorable to the vast majority of S-corp dental practices. 

The ADA has been lobbying the S-corp tax reform issue for all of 2017 and it is a key advocacy priority for the Association.

In a letter to Senate Finance Chair Orrin Hatch, R-Utah, and Ranking Member Ron Wyden, D-Oregon, the Association praised the committee for the changes to the proposal, which would allow dentists making under $250,000 and filing individually to receive a 17.4 percent tax rate on a percentage of their income. The same rate would apply to dentists making under $500,000 and filing jointly. 

Based on data from the ADA Health Policy Institute and Bureau of Labor Statistics, the Association estimates that a vast majority of S-corp dental offices would benefit from the Senate proposal. 

"As you may know, one dental office contributes an estimated $1.7 million dollars annually to the economy and the dental industry overall has an economic impact of $272 billion," wrote ADA President Joseph P. Crowley and Executive Director Kathleen T. O'Loughlin in a Nov. 15 letter to the committee. "Our dental office S corporations are key 'main street' businesses and with these lower tax rates dentists will be better able to expand their businesses, hire more employees, and continue to contribute directly to their local and the national economy," noting that as many as 53 percent of dental practices are organized as pass-through entities or S-corps.

"Thank you again for your recognition of dentists as true job creators," Drs. Crowley and O'Loughlin concluded. 
Follow all of the ADA advocacy activities on tax reform at