On April 15, a group of bipartisan lawmakers announced the formation of a new SALT Caucus that will work to advocate for new tax relief from Congress. A key priority of the caucus is to repeal the $10,000 cap on State and Local Tax (SALT) deductions established by the Tax Cuts and Jobs Act (TCJA) of 2017 (P.L. 115-97). The caucus has four co-chairs: Rep. Andrew Garbarino (R-N.Y.), Rep. Josh Gottheimer (D-N.J.), Rep. Young Kim (R-Calif.) and Rep. Tom Suozzi (R-N.Y.). Prior to the establishment of the cap in the 2017 TCJA, SALT was one of the highest claims made by individuals on their annual tax filings.
Counties have supported the full restoration of the SALT deduction, which allows taxpayers to deduct state and local taxes paid from their federally taxable income. The deduction protected individuals and families from double taxation and preserved local decision-making authority. Capping the deduction at $10,000 has limited state and local control of tax systems shifting the intergovernmental balance of taxation.
The congressional caucus has signaled that they want SALT restoration to be a part of the next infrastructure package, which is currently the top priority in Congress. Prior to the President’s unveiling of his American Jobs Plan, which outlines his priorities for a comprehensive infrastructure package, members of the House Ways and Means Committee sent a letter requesting as much.
NACo supports full restoration of the SALT deduction and will continue to work with congressional champions to achieve this county priority.