Overview
Peter Faber suggested in a paper cited here that states will adopt the new tax bill’s limits on net business interest deductions. “It would be important that state legislatures keep the linkage between expensing and the interest deduction disallowance in mind,” Mr. Faber wrote. “If a legislature chose not to adopt expensing, it should also not adopt the interest disallowance. One hopes that legislatures will be sophisticated enough to recognize the linkage and act accordingly.”