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In an opinion today, the Second Circuit affirmed Judge Oetken’s dismissal (covered here) of a lawsuit in which four states, including New York, sought to invalidate law passed in 2017 capping on the deduction for state and local taxes (SALT) on a filer’s federal income tax returns. The Second Circuit agreed that whatever burden the cap imposed on states was no so severe to violate federalism principles:
Continue Reading Second Circuit Upholds Judge Oetken’s Rejection of Constitutional Challenge to 2017 “SALT” Deduction Cap

In an opinion today, Judge Oetken rejected a lawsuit (covered here) by which four states, including New York, sought to invalidate the newly-enacted cap on the deduction for state and local taxes (SALT) on a filer’s federal income tax returns.  The challengers argued the law “verg[es] into territory that is constitutionally reserved to the states.”  But Judge Oetken found that, while the law may alter what types of state tax laws are more or less attractive—for example, it creates disincentives for high state tax rates—the law nonetheless does not improperly infringe on states’ sovereign authority to exercise their taxing powers as they wish:
Continue Reading Judge Oetken Dismisses Constitutional Challenge to Cap on State and Local Tax Deductions

Yesterday, New York, New Jersey, Connecticut, and Maryland filed a complaint against the U.S. Treasury Department and others, seeking to invalidate the newly-enacted cap on the deduction for state and local taxes (SALT) on a filer’s federal income tax return.  Prior to the 2017 changes to the tax law, all or a substantial portion of SALT could be deducted from a federal tax return.  After 2017, the deduction was capped at $10,000.
Continue Reading Four States Sue Treasury Department Over Cap on State and Local Tax Deduction