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Corporate Tax Research Papers

Mandatory Passthrough Taxation for Non-Publicly Traded Businesses?

October 30, 2017
A coffee shop in Bintaro, Indonesia by Nafinia Putra via Unsplash

Discussions regarding corporate tax reform often focus on the large, typically public, companies — but what about the treatment of private businesses?

In a new research paper, Professor Anthony P. Polito from Suffolk University Law School looks at whether private businesses should receive mandatory passthrough treatment. He ultimately decides that passthrough treatment shouldn’t be mandatory, but comes up with some other ideas for tax reform.


Should passthrough taxation be made mandatory for all businesses whose equity is not publicly traded? In the current tax policy environment, every business that is or becomes a non-publicly traded business has access to passthrough taxation, but not without β€” in some cases β€” significant tax costs. Employing a perspective that corporate tax integration is desirable and should be encouraged, this article examines whether passthrough tax treatment should be made mandatory for such companies. In the end, the answer is no; it should not be made mandatory. However, the exercise of answering the question highlights several incremental tax law reforms that could be adopted to advance the project of corporate tax integration.

More: Polito, Anthony P., “Mandatory Passthrough Taxation for Non-Publicly Traded Businesses?” (October 18, 2017). Virginia Tax Review, Vol. 36, p. 449, 2017; Suffolk University Law School Research Paper No. 17-17.

Photo: Nafinia Putra.

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