Justices reject states’ appeal over cap on tax deductibility

Justices reject states’ appeal over cap on tax deductibility

WASHINGTON (AP) — The Supreme Court has rejected a challenge from New York, New Jersey, Connecticut and Maryland to the 2017 tax law that capped federal tax deductions for state and local taxes. The lawsuit had previously been dismissed by lower courts. The suit argued that the Republican-led tax law, signed by then-President Donald Trump, unfairly singled out high-tax states in which Democrats predominate. The law caps a deduction for state and local taxes, known as SALT, at $10,000. The lawsuit claimed lawmakers crafted the provision to target Democratic states, interfering with the states’ constitutionally granted taxing authority. Legislation to raise the cap has passed the House but not the Senate.

Photo: Sen. Mike Crapo, R-Idaho, looks over a chart before the start of a news conference to discuss the state and local tax (SALT) cap provision in President Joe Biden’s domestic agenda, at the Capitol in Washington, Wednesday, Dec. 1, 2021. (AP Photo/J. Scott Applewhite)