(The Center Square) – Gov. Ned Lamont and Attorney General William Tong are taking their battle against SALT taxes to the U.S. Supreme Court.
The pair announced in a Wednesday news release Connecticut has filed a petition for certiorari with the Supreme Court for what the state terms “unlawful and unprecedented caps” on deductions for state and local taxes, known as SALT taxes.
“The SALT cap was a politically motivated money grab by the previous president that continues to cost Connecticut families an estimated $2.8 billion a year,” Tong said in the release. “We are asking the Supreme Court to hear our appeal and block this unprecedented and unlawful interference in our states’ tax decisions. I thank the Connecticut Congressional delegation for their sustained efforts to reverse this partisan tax hike.”
The SALT cap was a politically motivated money grab by the previous president that continues to cost Connecticut families an estimated $2.8 billion a year. We are asking the Supreme Court to block this unlawful interference in our states’ tax decisions.https://t.co/7NAhaRqJfa— AG William Tong (@AGWilliamTong) January 5, 2022
As part of the Trump-era Tax Cuts and Jobs Act capped the amount of state and local taxes that workers could deduct from their federal tax filings at $10,000. Proponents of the cap argued that lower-tax states shouldn't have to pay more in federal income taxes than those from higher tax states, who previously were able to deduct an unlimited amount of local and states taxes.
The petition, according to the release, is asking the court to review an October 2021 ruling by the U.S. Court of Appeals in the Second Circuit. That decision upheld a district court rejection of the state’s lawsuit. The lawsuit argues SALT tax deduction caps were politically motivated by the former administration to “interfere with the policy choices of predominantly Democratic states.”
Connecticut filed the lawsuit in July 2018 with the U.S. District Court for the Southern District of New York. The state’s argument is that the SALT deduction cap “was enacted to target Connecticut and similarly situated states” to “interfere with the states’ rights to make their own fiscal decisions.”
The state’s Department of Revenue services conducted analysis showing the cap increased federal taxes paid by Connecticut residents by $2.8 billion in 2018. Supporters of the cap said residents should have been paying the higher amount all along.
The U.S. District Court for the Southern District of New York ruled against the coalition of states in September 2019.
New York, Maryland, and New Jersey were joined with Connecticut in filing the petition.