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Schumer, Senate Democrats will force vote to repeal IRS ruling on SALT cap workaround

Brittany De Lea

Senate Democrats plan to force a vote to repeal a recent ruling regarding the controversial $10,000 cap on state and local tax deductions, imposed under the Tax Cuts and Jobs Act.

Senate Minority Leader Chuck Schumer and Sen. Ben Cardin announced on Thursday that they would use a disapproval resolution under the Congressional Review Act to “force a majority-threshold vote” on a measure to repeal IRS rules that block a SALT cap workaround.

Specifically, the vote will be on “a resolution to repeal the IRS rule that prohibits states and local governments from protecting residents from ‘double taxation’ of their local charitable contributions and State and Local Taxes (SALT) under the Trump tax bill,” Schumer, a Democrat from New York, said in a press release.

In response to the cap, a number of state governments proposed or enacted legislation that would allow taxpayers to make charitable contributions to an established state fund in order to earn a credit. The goal would be to allow the residents to take the full amount given as a deduction by transforming a non-deductible payment into a charitable contribution.

The IRS and the Treasury Department officially squashed that workaround in June.

Additionally, Senate Democrats plan to force votes to repeal the EPA’s “Affordable Clean Energy” Rule next week and a resolution to save protections for pre-existing conditions to be covered by health insurers.

A disapproval resolution must be submitted within 60 days after Congress receives a rule. Thirty senators are required to submit a petition for the purpose in order for it to proceed. The resolution would require a majority to pass – although Democrats do not hold a majority in the chamber.

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New York and Maryland, where Cardin is from, are two of four states that filed a lawsuit to have the SALT cap declared unconstitutional. Their lawsuit, however, was recently dismissed by a judge. Schumer’s office, as well as the New York Attorney General, have indicated that they may appeal the decision.

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