FL - Correction: interest rates for second half of 2024 announced
The floating interest rate applicable to taxes administered by the Florida Department of Revenue on underpayments (deficiencies) and late payments […]
Read MoreThe Court of Appeals for the Second Circuit affirmed the district court’s judgment that the cap on the federal income tax deduction for money paid in state and local taxes (SALT) is constitutional. Four states brought a claim against the government alleging that the $10,000 cap on the federal income tax deduction for money paid in state and local taxes, enacted as part of the Tax Cuts and Jobs Act ( P.L. 115-97) (TCJA), violated the Constitution. The states argued that the state and local tax deduction was constitutionally mandated, or alternatively that the cap violated the Tenth Amendment because it coerced them to abandon their preferred fiscal policies. The district court held that the states had standing and that their claims were not barred by the Anti-Injunction Act (AIA). However, the district court concluded that the claims lacked merit. The states’ allegations that the cap decreases the frequency and price at which taxable real estate transactions occur by measurably increasing the cost of those transactions reflect specific lost tax revenues and suffice to support standing. Moreover, the exception in South Carolina v. Regan, 84-1 USTC ¶9241, 465 U.S. 367, 373 (1984), applied to the facts of this case, therefore, the court held that the AIA did not foreclose its review of the states’ claim.
Background
The federal tax code’s state and local tax (SALT) deduction permitted taxpayers to deduct from their taxable income all the money they paid in state and local income and property taxes. However, in 2017, Congress passed the TCJA which imposed a cap on the SALT deduction. The immediate impact of this cap was felt most acutely in states where the state and local tax liability of residents often exceeded the $10,000 maximum. Four of the most affected states, namely, New York, Connecticut, New Jersey, and Maryland, sued the government asserting that the cap on the SALT deduction was unconstitutional on its face and unconstitutionally coerced them to abandon their preferred fiscal policies. The government responded by stating that the district court lacked subject matter jurisdiction to consider the states’ claims and also defended the cap on the merits. The district court rejected the government’s jurisdictional defense but dismissed the complaint for failure to state a claim. On appeal, the states argued that the district court erred on the merits.
Affirming an unpublished District Court opinion.
The floating interest rate applicable to taxes administered by the Florida Department of Revenue on underpayments (deficiencies) and late payments […]
Read MoreThe IRS announced that it is continuing to expand the features within Business Tax Account (BTA), an online self-service tool […]
Read MoreThe IRS has issued a series of questions and answers for 401(k) and similar retirement plans that provide, or wish […]
Read MoreThe IRS Whistleblower Office has recognized the contributions of whistleblowers on the occasion of National Whistleblower Appreciation Day, which falls on July […]
Read MoreThe IRS has issued a reminder that summer day camp expenses may be eligible for the Child and Dependent Care tax […]
Read MoreThe IRS has updated frequently asked questions (FAQs) to provide guidance related to the critical mineral and battery component requirements […]
Read MoreThe IRS has warned taxpayers not to fall for scams centered around the Fuel Tax Credit, the Sick and Family […]
Read MoreThe IRS has issued a cautionary alert to taxpayers about a new scam exploiting clean energy tax credits. This emerging […]
Read More