Four states in the eastern U.S. will attempt to revive their lawsuit challenging the Trump administration’s cap on the deduction for state and local taxes, known as SALT, after a judge dismissed the case.
New York, Connecticut, Maryland and New Jersey will take their challenge to the federal appeals court in Manhattan after a judge tossed their lawsuit in September, New York Attorney General Letitia James and the state’s governor, Andrew Cuomo, said Tuesday in a statement.
The 2017 tax law passed by Republican lawmakers capped the amount of state and local taxes that can be deducted on individual returns at $10,000. Previously, there was no limit. Democrats in Congress and some state officials said the change targeted Democratic-led states that tend to have higher taxes. Cuomo called it “economic civil war.”
The cap “is expected to cost New York’s taxpayers over $100 billion, which is why we will fight this senseless and unconstitutional law,” James said in the statement.
In September, U.S. District Judge J. Paul Oetken threw out a lawsuit, saying the federal government has the “exhaustive” power to impose and collect income taxes and that the states can enact their own tax policies as they wish.