Treasury Releasing Rules for State, Local Use of Relief Funds

May 10, 2021, 5:00 PM

The Treasury Department is releasing details on allowed uses of the $350 billion in state and local aid in the latest federal relief law, after lawsuits and questions from states.

The guidance, described in a fact sheet, addresses a provision in the American Rescue Plan Act (Pub. L. No. 117-2) that prevents states and municipalities from using funds to “directly or indirectly offset a reduction in the net tax revenue.”

States will be required to demonstrate what policies they are enacting to make up for forgone revenue from any tax cuts, according to the fact ...

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