Four States Sue the Federal Government Over State & Local Deduction Caps

The states of New York, Connecticut, Maryland and New Jersey sued the United States today over new rules ushered in via the 2017 federal tax overhaul which cap federal deductions of state and local taxes (SALT) to $10,000.  Such a cap disproportionately affects blue states’ economic growth and ability to pay for essential local services, e.g., an analysis by the New York State Department of Taxation and Finance shows that the cap will increase New Yorkers’ federal taxes by $14.3 billion in 2018 alone, and an additional $121 billion between 2019 and 2025.   The lawsuit was filed in New York Federal District Court and is being led by the New York Attorney General, Barbara Underwood.

More Resources:

State of New York, et al. v. Mnuchin et al., Docket & Complaint via Justia

States Sue US to Void State and Local Tax Deduction Cap, The New York Times, July 17, 2018.

A.G. Underwood And Gov. Cuomo Announce Lawsuit To Protect New York Taxpayers From Drastic Cut In State And Local Tax Deduction, July 17, 2018.