Four States Sue the IRS Regarding the Cap on the State and Local Tax Deduction (SALT)
Well, well, well, four states are not taking the new (2018) cap on state and local taxes lying down.
New York, Connecticut, Maryland and New Jersey have filed a lawsuit against the IRS, the Department of the Treasury, and the United States of America seeking injunctive relief to invalidate the new $10,000 cap on the federal tax deduction for state and local taxes (SALT).
The lawsuit argues that the SALT deduction is essential to prevent the federal tax power from interfering with the states’ sovereign authority to make their own choices about whether and how much to invest in their own residents businesses, infrastructure and more. They note that the SALT deduction has been available since 1861.
The states make three claims of unconstitutionality that the SALT cap violates the 10th Amendment (states’ rights), that it violates the 16th Amendment (federal power to tax incomes) and that it violates Article I, Section 8 (Congress’s power to tax).
For more on the effect of the new $10,000 cap take a look at one of my prior articles here.
Just in case you are curious and would like to read the lawsuit 😂 you can take a look at it right here.
If you need help with your SALT (or other tax items), don’t be shy, just reach out to us (Solid Tax Solutions) at
(845) 344-1040 ☛ year round.
Bruce – Your Host at The Tax Nook
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