Justices Reject New York-Led Appeal of Cap on Tax Deductibility

Justices Reject New York-Led Appeal of Cap on Tax Deductibility Justices Reject New York-Led Appeal of Cap on Tax Deductibility (STEFANI REYNOLDS/AFP via Getty Images)

Monday, 18 April 2022 10:14 AM

The Supreme Court on Monday 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. It 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 that 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 of Representatives but not the Senate.

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