U.S. markets closed

SALT cap repeal the 'single best' action to help New York, Cuomo says

Brittany De Lea

Get all the latest news on coronavirus and more delivered daily to your inbox.  Sign up here.

The Democratic governor of New York, Andrew Cuomo, is repeating calls for Congress to repeal the controversial cap on state and local tax deductions, which he says cost his state tens of billions of dollars each year.

“It increases the taxes of homeowners in certain states – New York is one of them,” Cuomo said during his daily press briefing on Wednesday. “It costs New York state about $29 billion per year, the state of Massachusetts $11.8 billion. It also affects New Jersey, Connecticut, Maryland.”

CORONAVIRUS-INSPIRED SALT CAP RELIEF MAY INCENTIVIZE MORE PEOPLE TO PAY THEIR TAXES

Cuomo’s renewed repeal push comes after lawmakers introduced a stimulus bill in the House of Representatives on Tuesday that includes a provision to repeal the $10,000 SALT cap. The cap was implemented as part of the 2017 Tax Cuts and Jobs Act.

Cuomo said the repeal is “the single best piece of action for the state of New York,” adding he hopes it will make it into the final legislation.

New York state needs about $61 billion in federal support or it faces spending cuts of about 20 percent, according to the governor. That would affect institutions ranging from schools to local governments to hospitals.

But beyond near-term budgetary concerns, alleviating pressure from the SALT cap could reduce longer-term damage.

CUOMO CALLS FOR MORE CORONAVIRUS STATE AID AS CONGRESS WORKS ON NEW FEDERAL STIMULUS PLAN

As previously reported by FOX Business, experts foresee a fresh exodus of residents from higher-tax states like New York and New Jersey, where the coronavirus outbreak has been particularly severe. Many people with second homes or vacation homes have taken shelter there, and as the health care concerns caused by the pandemic pile onto existing tax frustrations, they may choose to stay permanently.

“A lot of people are like ‘I’m here anyway I might as well give it a go,’” Timothy Noonan, state and local tax expert and partner at Hodgson Russ, told FOX Business. “Easing the SALT limitation would go a long way to keep folks living in these [high-tax] states.”

Noonan has personally received multiple inquiries from clients about changing their domicile from New York to Florida during the coronavirus outbreak.

GET FOX BUSINESS ON THE GO BY CLICKING HERE

Prior to the implementation of the $10,000 cap, the average deduction claimed by New York residents was more than $20,000.

The Empire State lost $9.6 billion in 2018 alone as wealthy individuals and businesses moved out.

Democratic lawmakers in the House of Representatives unveiled a relief proposal Tuesday, which is said to include $1 trillion for state, local and tribal governments.

Cuomo and Maryland Gov. Larry Hogan on Wednesday asked Congress to make state fiscal relief a top priority, reiterating calls for $500 billion to address budgetary shortfalls that have resulted from the pandemic.

GET FOX BUSINESS ON THE GO BY CLICKING HERE

Related Articles