State SALT Cap Challenge Rejected by Second Circuit (1)

A federal appeals court has upheld the $10,000 federal deduction limit on state and local tax payments, finding states’ constitutional claims lacked merit.

New York, New Jersey, Maryland, and Connecticut unsuccessfully argued that the SALT cap—established in the 2017 tax law—violates the Tenth and Sixteenth amendments.

Tuesday’s Second Circuit opinion, authored by Judge Raymond A. Lohier, upheld the legality of the deduction limit. The court decided that the unlimited deduction that was available before 2017 isn’t mandated by the U.S. Constitution and that the cap doesn’t unconstitutionally infringe on state sovereignty.

The ruling means people who ...