Treasury Defends SALT Deduction Cap Against N.Y.-Led Lawsuit

Congress was within its constitutional rights to rein in a deduction for state and local tax payments in the 2017 tax code overhaul, the Treasury Department told the Second Circuit in a court filing.

The Trump administration is defending the $10,000 SALT cap from an appeal brought by New York, Connecticut, Maryland, and New Jersey. The limit has drawn the ire of congressional Democrats and some state governors, who argue that it targets high-tax blue states.

The states want the U.S. Court of Appeals for the Second Circuit to overturn a 2019 federal district court ruling to dismiss their ...