Matthew Yglesias (Think Progress), Corporate Political Contributions as Tax Break:

Citizens United is going to be a significant tax break for politically active smallish business owners. If you used to be a guy who shelled out $10,000 a year on political contributions, then you used to need to pay yourself substantially more than that in nominal salary, then pay taxes on the money, and then hand out the ten grand. Now if you own the business, you can have the company pay and then instead of it being income on which you pay tax, it becomes an expense for the business.

This kind of affect would have a strong partisan valence, as owners and proprietors are the most Republican occupational group in America by a wide margin.

When I looked at this issue in preparing for a recent program, it seemed clear that expenditures in support of or in opposition to a candidate were not deductible expenses for purposes of federal income taxation. If that is correct, then the corporation (other than an S Corp.) that runs such ads will have paid corporate income tax on the amount expended (if the corporation has net income). If, by contrast, the corporation increases the principal's salary so that he or she can afford to pay personally to run the ads, the salary will be deductible to the corporation but taxable income to the principal. (If I remember tax law correctly, that assumes the IRS does not find that the larger salary is unreasonable and thus is in part actually a dividend, which would not be deductible to the corporation but still would be taxable to the principal.) Whether the tax bite is larger under one approach than under the other will depend on which tax rate is higher. With regard to increased salary, that would result in increased medicare tax as well as increased peronal income tax liability, and thus all taxes would need to be taken into account.

To the extent, then, that a closely held corporation can justify increasing its principals' salaries, extra money can be gotten to them for them to spend as they choose (including on campaign ads) in a way that will reduce the corporation's tax liability but increase the principals' tax liability. The issue thus does not seem as open and shut as Yglesias suggests. I've just skimmed a few of the comments on Yglesias' post, but some of them make similar points.

In addition, because of the clear personal benefit to the sole or at least major shareholder of the corporation from the corporation's making of the campaign ad expenditure, the IRS might have reason to treat the expenditure as a disguised dividend. That would render the principal liable for taxes on the amount of the expenditure. But I am far from an expert on taxation; we probably should get Prof. Paul Caron or someone else who knows taxation to opine on this question.

From Publication 535 (Business Expenses):

Political contributions. Contributions or gifts paid to political parties or candidates are not deductible. In addition, expenses paid or incurred to take part in any political campaign of a candidate for public office are not deductible.

Update:

• Rick Hasen (Loyola-L.A.), Election Law Blog:  "I think Yglesias means "expenditures," but he has a point, no? UPDATE: No. Tax people tell me this is not correct. I will post a longer explanation later.
• Ellen Aprill (Loyola-L.A.), Tax Code Denies Business Deductions for Political Expenditures: "The rule of using only pre-tax money for lobbying and political expenditures is achieved for businesses, whether or not incorporated, because the general provision that allows deductions for trade and business expenses, s 162 has a special rule in subsection (e) disallowing a deduction for lobbying and political expenditures (with another special rule allowing the deduction for certain cases of local legislation). …  Nowhere in Citizens United does the Court question the denial of the deduction for corporate lobbying expenditures or suggest that it is an unconstitutional burden."
• Donald B. Tobin (Ohio State), Political Advocacy and Taxable Entities: Are They the Next 'Loophole'?