New Jersey, New York, Connecticut Sue to Keep SALT Workarounds (3)

Three states sued the IRS and Treasury Department July 17 over recent rules meant to curb state workarounds of the $10,000 cap on state and local tax deductions.

The SALT cap has been among the most contentious elements of the 2017 tax law. Democrats in high-tax states have slammed the provision, saying it hurt their constituents. But they have also struggled with the reality that fully restoring the tax break would mostly help the wealthy.

The June final rules (T.D. 9864) at issue prohibit workarounds that states, including New York and New Jersey, established that allow state ...