Bloomberg Tax
Sept. 24, 2021, 9:53 PMUpdated: Sept. 24, 2021, 11:37 PM

Kentucky Wins Legal Challenge to Pandemic Aid Tax Cut Limits (1)

Sam McQuillan
Sam McQuillan

Two federal judges have now ruled against restrictions on the $350 billion in pandemic aid sent to state and local governments as part of the American Rescue Plan.

The U.S. District Court, Eastern District of Kentucky on Friday ruled in favor of Kentucky, permanently enjoining Treasury Secretary Janet Yellen from enforcing a provision of the law that would claw back funds used to offset revenue losses from a tax cut. The decision follows a similar ruling in Ohio, where a federal judge found the restriction cannot be enforced because it’s unclear what it prohibits. Legal challenges from 10 other states ...