State Governments Working Overtime to Ameliorate SALT Impacts

By:
Chris Gaetano
Published Date:
Jan 2, 2018
TaxWorry

With the landmark tax reform bill effectively capping deductions on state-level taxes at $10,000, governments in high-tax, high-cost-of-living states are working on a number of options to blunt the impact on their taxpayers, according to the New York Times. In the short term, there are those like New York Governor Andrew Cuomo who said that taxpayers could prepay their property tax bills so they could take advantage of the deduction while it's still there (though the IRS has taken a dim view of this tactic). Other states are considering moves like putting more emphasis on business tax, which remain deductible, replacing income tax with a payroll tax, making tax payments as a deductible charitable contribution, and finding new revenue sources such as marijuana. Beyond that, some have plans to challenge the measure on constitutional grounds, such as newly-elected New Jersey Governor Philip D. Murphy, though it is unknown whether such a challenge could succeed. 

Governor Cuomo plans to unveil a more detailed plan to mitigate the worst impacts of the new SALT rules when he presents his state budget in a few weeks. 

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