A multi-year, multi-state effort to legally challenge federal changes to the tax deductibility of state and local taxes on federal income tax returns has ended, with the Supreme Court’s decision to decline a review of the case.
Maryland, among several other states, had challenged the federal law limiting the ability of taxpayers to “write off” taxes paid to state and local governments on their state taxes. The 2017 changes limit this deduction to $10,000 and will implicitly stand by the Supreme Court’s decision this week.
The high court issued an order Monday denying the request from New York, New Jersey, Maryland, and Connecticut to review a decision of the U.S. Court of Appeals for the Second Circuit. The appeals court rejected several state legal arguments against the cap, including that it unconstitutionally coerces the states to abandon their preferred fiscal policies.
The cap generally blocks taxpayers who itemize federal deductions from deducting more than $10,000 per year for paid state and local taxes, including property taxes and either income or sales taxes.
From the online news site Just The News:
The states argued that the SALT cap was unconstitutional – though that argument gained no judicial traction. In 2019, a federal district court ruled against the states, as did the U.S. Court of Appeals for the 2nd Circuit in 2021.
The court as it frequently does, did not provide a reason as to why it will not take up the case.