The attorneys general for New York, Connecticut, Maryland and New Jersey filed a lawsuit [complaint, PDF] on Tuesday against the Trump administration’s $10,000 limit on the federal deduction for state and local taxes (SALT), alleging that it harms taxpayers and undermines state sovereignty.
The suit alleges that taxpayers in the plaintiff states will not only be paying more taxes but will also be receiving the least benefit from the new tax plan relative to other states.
The complaint says:
As the drafters of the Sixteenth Amendment [footnote omitted] and every subsequent Congress have understood, the SALT deduction is essential to prevent the federal tax power from interfering with the States’ sovereign authority to make their own choices about whether and how much to invest in their own residents, businesses, infrastructure, and more—authority that is guaranteed by the Tenth Amendment and foundational principles of federalism.
The complaint was filed in the US District Court for the Southern District of New York [official website]. The state attorneys general are seeking an injunction against the tax cap.
The $10,000 tax cap was passed in December and took effect this year.
New York’s Attorney General Barbara Underwood [official profile] said [press release], “We will not allow partisans in Washington to hurt our people or interfere with our policies.”