NACo and coalition partners call on Congress to preserve municipal bond exemption and state and local deduction in tax reform
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BlogOn April 4, NACo, in partnership with other state and local governmental organizations, sent a letter to all members of Congress urging lawmakers to preserve both the tax exemption for municipal bonds and the state and local tax (SALT) deduction.NACo and coalition partners call on Congress to preserve municipal bond exemption and state and local deduction in tax reform
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Blog
NACo and coalition partners call on Congress to preserve municipal bond exemption and state and local deduction in tax reform
On April 4, NACo, in partnership with other state and local governmental organizations, sent a letter to all members of Congress urging lawmakers to preserve both the tax exemption for municipal bonds and the state and local tax (SALT) deduction. NACo was joined on the letter by the National Governors Association, National League of Cities, U.S. Conference of Mayors, National Conference of State Legislatures, Council of State Governments and the International City/County Management Association.
Tax-exempt municipal bonds have been a fundamental feature of the United States tax code since 1913 and remain the primary method used by states and local governments to fund public infrastructure projects, including our roads, bridges, schools, hospitals, water infrastructure and much more. In fact, over the last decade, state and local governments have financed $3.8 trillion dollars in infrastructure investments using municipal bonds. Any changes to their tax-exempt status – either a complete elimination or a cap on the exemption – would drive up the costs of financing this critical infrastructure for both counties and taxpayers.
Another priority for counties in tax reform is protecting the SALT deduction, which was also included in the original 1913 tax code. The SALT deduction allows taxpayers to deduct state and local taxes paid, including property and income tax, from their federal taxable income. This provision provides counties some measure of autonomy over our own tax systems and incentivizes local investment in various services, including health, education and transportation. Eliminating or capping the SALT deduction would represent double taxation on taxpayers and could greatly constrain policy options available to state and local governments.
As tax reform discussions continue, we will continue working with Congress to ensure counties’ interest are represented and maintained in a comprehensive tax overhaul.
To read the full letter, please click here.
On April 4, NACo, in partnership with other state and local governmental organizations, sent a letter to all members of Congress urging lawmakers to preserve both the tax exemption for municipal bonds and the state and local tax (SALT) deduc2017-04-11Blog2017-08-15
On April 4, NACo, in partnership with other state and local governmental organizations, sent a letter to all members of Congress urging lawmakers to preserve both the tax exemption for municipal bonds and the state and local tax (SALT) deduction. NACo was joined on the letter by the National Governors Association, National League of Cities, U.S. Conference of Mayors, National Conference of State Legislatures, Council of State Governments and the International City/County Management Association.
Tax-exempt municipal bonds have been a fundamental feature of the United States tax code since 1913 and remain the primary method used by states and local governments to fund public infrastructure projects, including our roads, bridges, schools, hospitals, water infrastructure and much more. In fact, over the last decade, state and local governments have financed $3.8 trillion dollars in infrastructure investments using municipal bonds. Any changes to their tax-exempt status – either a complete elimination or a cap on the exemption – would drive up the costs of financing this critical infrastructure for both counties and taxpayers.
Another priority for counties in tax reform is protecting the SALT deduction, which was also included in the original 1913 tax code. The SALT deduction allows taxpayers to deduct state and local taxes paid, including property and income tax, from their federal taxable income. This provision provides counties some measure of autonomy over our own tax systems and incentivizes local investment in various services, including health, education and transportation. Eliminating or capping the SALT deduction would represent double taxation on taxpayers and could greatly constrain policy options available to state and local governments.
As tax reform discussions continue, we will continue working with Congress to ensure counties’ interest are represented and maintained in a comprehensive tax overhaul.
To read the full letter, please click here.

About Jack Peterson (Full Bio)
Director of Strategic Relations
Jack serves as the director of strategic relations. In this role, he works with NACo’s corporate partners, state associations of counties and other affiliate organizations.More from Jack Peterson
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Strengthening Local Economies through the Recovery Fund: Executive Summary
NACo's report examines how counties are leveraging American Rescue Plan resources to support communities and rebuild the economy, even as the pandemic continues to affect jobs, public health, housing, and more. -
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American Rescue Plan Resource Hub
In March of 2021, the American Rescue Plan Act of 2021 authorized the $350 billion State and Local Coronavirus Fiscal Recovery Fund (Recovery Fund), which provided $65.1 billion in direct, flexible aid to every county in America. -
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Legislation to restore the state and local tax (SALT) deduction introduced in 118th Congress
In January and February 2023, lawmakers in the 118th Congress have introduced several pieces of legislation to restore the federal state and local tax (SALT) deduction. -
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Support legislation that would restore advance refunding bonds.
Urge your members of Congress to introduce and support the passage of legislation that would restore advance refunding bonds.
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ClearGov
ClearGov® is the leading provider of Budget Cycle Management software, focused on helping local governments streamline the annual budgeting process by improving the collection, creation, and communication of their budgets.pagepagepage<table border="1" cellpadding="1" cellspacing="1" style="width:100%" summary="call-out transparent">
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Finance, Pensions & Intergovernmental Affairs Steering Committee
All matters pertaining to the financial resources of counties, fiscal management, federal assistance, municipal borrowing, county revenues, federal budget, federal tax reform, elections and Native American issues. Policy Platform & Resolutions 2022-2023 2022 NACo Legislative Prioritiespagepagepage<p>All matters pertaining to the financial resources of counties, fiscal management, federal assistance, municipal borrowing, county revenues, federal budget, federal tax reform, elections and Native American issues.</p>
Contact
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Director of Strategic Relations(202) 661-8805
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