U.S. District Court Upholds Constitutionality of $10,000 SALT Deduction Cap

The U.S. District Court for the District of New Jersey held that the $10,000 limitation on the state and local tax (SALT) deduction under I.R.C. §164(b)(6), enacted by the Tax Cuts and Jobs Act, is constitutional, granting the government’s motion to dismiss. Plaintiffs, two individuals, challenged the constitutionality of the Tax Cuts and Jobs Act’s $10,000 limitation on the state and local tax deduction, arguing it violated multiple constitutional provisions, including the Tenth Amendment, Privileges and Immunities Clause, and Sixteenth Amendment. They alleged the cap was designed to coerce high-tax states into changing their fiscal policies and discriminated against residents ...