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New York, 3 other states sue over federal tax reform law

New York and three other states have sued the federal government in an attempt to overturn the newly enacted $10,000 cap on state and local tax deductions, which was included in the Republican tax reform plan last year.
Credit: Micha? Chodyra
(Photo: Thinkstock)

ALBANY — New York and three other states have sued the federal government in an attempt to overturn the newly enacted $10,000 cap on state and local tax deductions, which was included in the Republican tax reform plan last year.

Gov. Andrew Cuomo and state Attorney General Barbara Underwood announced the lawsuit Tuesday morning, filing it in Manhattan federal court on behalf of New York and three other states: New Jersey, Connecticut and Maryland.

Cuomo had been threatening a lawsuit for months, arguing that the state and local tax deduction cap, known as SALT, unfairly targeted Democratic, high-tax states like New York.

"The so-called SALT provision was un-American," Cuomo told reporters on a conference call Tuesday. "What you did was you divided the states. You penalized the Democratic states."

The lawsuit contends the $10,000 cap interferes with the "states’ sovereign authority to make their own choices about whether and how much to invest in their own residents, businesses, infrastructure, and more."

The suit claims the cap violates the 16th and 10th amendments.

"This Court should invalidate this unconstitutional assault on the States’ sovereign choices," the suit reads.

In a statement, Underwood said New York won't be "bullied."

"This cap is unconstitutional – going well beyond settled limits on federal power to impose an income tax, while deliberately targeting New York and similar states in an attempt to coerce us into changing our fiscal policies and the vital programs they support,” she said.

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