The governors of New York, New Jersey and Connecticut said Friday they are forming a coalition to sue the federal government over the newly enacted tax overhaul that caps deductibility of state and local taxes.
During a conference call with reporters, New York Gov. Andrew Cuomo repeated his criticism that the federal tax overhaul approved by Congress in December and signed by President Donald Trump is illegal.
“There is a very strong argument that the bill is a fundamental violation of states’ rights and repugnant to the very concept of federalism that formed this nation,” Cuomo said in a conference call with newly installed New Jersey Gov. Phil Murphy and Connecticut Gov. Dannel Malloy. All three are Democrats.
The tax overhaul Trump signed in December caps a deduction for state and local taxes at $10,000—the deduction previously was unlimited—which may increase the federal tax liability for many homeowners in high-tax states such as New York and New Jersey.
Murphy said he expects the lawsuit against the federal government to be filed within weeks. A spokeswoman for Attorney General Eric Schneiderman confirmed that a lawsuit against the federal government has not yet been filed. A decision on the court in which it will be filed hasn’t yet been made, Malloy said.
“We are having some conversations offline with other states and I think we’ll choose the best and appropriate venue when the time comes. It probably will be a venue within our area,” Malloy said, referencing the tri-state area.
Earlier this month, during his annual State of the State address to the Legislature, Cuomo said he planned to sue the federal government over the federal tax law arguing that it violates constitutional principles. Legal experts who specialize in tax law, however, have doubted the likelihood of a success of such a legal challenge, because the 16th Amendment of the U.S. Constitution allows Congress to collect taxes on incomes.
The governor’s top counsel, Alphonso David, told the New York Law Journal earlier this month that the Cuomo administration is considering “a variety of claims” against the federal government over the tax law. Despite the legal hurdles such a lawsuit could face, Cuomo said Friday the federal government is infringing on state’s rights.
“States are not colonies of the federal government. This is purely double taxation. You are getting taxed on the state income tax and your property tax. … Legally we believe there’s a very strong argument that it’s unconstitutional,” Cuomo said on the call. “The federal government is trying to trample state’s rights.’’