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Home / Legislative / News / Congressional Update: Congress Considering Elimination of State and Local Tax Deduction

Congressional Update: Congress Considering Elimination of State and Local Tax Deduction

As part of current discussions on broad tax reform, Congress is considering eliminating or capping the state and local tax deduction on federal income taxes. Also known as the SALT deduction, it allows itemizers to deduct state and local property and sales taxes.

Both the U.S. House and Senate recently passed a budget blueprint that allows a comprehensive tax reform proposal to move forward. While initial tax reform discussions focused on a complete repeal of the deduction, concerns raised by congressional members from areas that disproportionately benefit from the deduction have made the issue a negotiating point.

U.S. House and Senate leadership have indicated that they expect tax reform legislation to be introduced in early November and have set forth an aggressive timeline for passage. It remains unclear what changes may be made to the deduction, but the issue is still being negotiated.

The National Association of Counties (NACo) has additional information about the issue on its website.