Daniel Acker | Bloomberg | Getty Images
Andrew Cuomo
New York, Connecticut, Maryland and New Jersey are suing the federal government, alleging that the new $10,000 cap on state and local tax deductions (SALT) is an “unconstitutional assault on states’ sovereign choices.”
New York governor Andrew Cuomo announced the lawsuit on Tuesday morning, naming Steven Mnuchin, U.S. Treasury Secretary, and David Kautter, acting commissioner of the Internal Revenue Service, among the defendants. The lawsuit is filed in the Southern District of New York.
“The federal government is hell-bent on using New York as a piggy bank to pay for corporate tax cuts and I will not stand for it,” said Cuomo.
He claims that the elimination of the SALT deduction will cost New Yorkers $14.3 billion in 2018 alone.
The four states seek to invalidate the new $10,000 limit on the federal tax deduction for state and local taxes, known as SALT.
In 2015, the average SALT deduction for New Yorkers who claimed the break was more than $22,000, according to the Tax Policy Center. In New Jersey, the average deduction was around $18,000.
More from Personal Finance
IRS may nix blue states’ workaround on tax deduction caps
High-tax states plan strategy in response to cap on SALT deduction
Treasury, IRS have set their sights on blue states’ tax workarounds
