U.S. Rep. Andrew Garbarino (R-NY) on April 10 led a bipartisan group of 45 lawmakers in introducing legislation that would allow taxpayers to fully deduct their state and local taxes (SALT) on their federal income returns.
The Securing Access to Lower Taxes by ensuring Deductibility Act, H.R. 2555, also known as the SALT Deductibility Act, is sponsored by Rep. Garbarino and would apply to taxable years beginning after Dec. 31, 2022, according to the text of the bill.
“The SALT deduction cap has devastated my community by placing an unfair financial burden on Long Islanders and on taxpayers across the country,” said Rep. Garbarino during an April 15 press conference on Long Island alongside fellow New York members and cosponsors of the legislation, U.S. Reps. Anthony D’Esposito (R-NY) and Nick LaLota (R-NY).
Among the other 43 members who signed on as original cosponsors of H.R. 2555 were U.S. Reps. Young Kim (R-CA) and Josh Gottheimer (D-NJ).
“Restoring the SALT deduction will get more dollars back into the pockets of hard-working, middle-class Jersey families who are already struggling with higher costs,” said Rep. Gottheimer. “The bill is supported by enough Republicans from Blue States that we would have the votes to block Red State attempts to gut SALT further and prevent it from coming back once the Tax Hike Bill expires in two and a half years.”
Specifically, the SALT Deductibility Act would amend Section 164(b) of the Internal Revenue Code of 1986 to repeal the limitation on the deduction of state and local property and income taxes.
The initial purpose of the SALT deduction, when it was first implemented more than a century and a half ago, was to prevent imposing federal taxes on top of state and local taxes already paid. In 2017, the SALT deduction was capped at $10,000, resulting in a tax increase for many middle-class families, according to a bill summary provided by the lawmakers.
“Long Islanders pay some of the highest property taxes in the country and, for the hardworking middle-class families in my district, the $10,000 cap means they are only able to deduct a fraction of what they pay from their federal income taxes,” said Rep. Garbarino. “I am talking about police officers, firefighters, nurses, teachers, and small business owners who are being double taxed on money that was never available to them.”
“This injustice has gone on long enough and, with this bipartisan legislation, we can finally right that wrong and provide much needed tax relief to millions of Americans,” he added.
H.R. 2555 has been referred to the U.S. House Ways and Means Committee for consideration.
Rep. Kim pointed out that Southern Californians in her district also shouldn’t have to pay more federal taxes on top of their already high state taxes and rising costs of living and housing.
“There are many of my colleagues on both sides of the aisle from states across the country whose constituents are unfairly hurt by the current cap on SALT deductions,” said Rep. Kim. “I will keep working with my colleagues on both sides of the aisle to get this across the finish line.”