Justices reject states’ appeal over cap on tax deductibility

Apr 18, 2022, 7:11 AM | Updated: 7:27 am
FILE - Visitors walk outside the Supreme Court building on Capitol Hill in Washington, Feb. 21, 202...

FILE - Visitors walk outside the Supreme Court building on Capitol Hill in Washington, Feb. 21, 2022. The Supreme Court on Wednesday, April 6, 2022, reinstated for now a Trump-era rule that had curtailed the power of states and Native American tribes to block pipelines and other energy projects that can pollute rivers, streams and other waterways. (AP Photo/Patrick Semansky, File)

(AP Photo/Patrick Semansky, File)

WASHINGTON (AP) — 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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Justices reject states’ appeal over cap on tax deductibility