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A week out from taking the oath of office, President-elect Trump is in full negotiation mode with blue-state Republican lawmakers who have been fighting to increase the State and Local Tax (SALT) deduction. Over the weekend, SALT Republicans met with Trump at Mar-a-Lago to work out the details of the proposal.
Currently, taxpayers may deduct up to $10,000 of property, sales, or income taxes already paid to state or local governments. SALT deductions reduce the tax burden for those who live in high-tax states such as New York, Connecticut, and California. The $10,000 cap was introduced in the Tax Cuts and Jobs Act of 2017 and will expire later this year, prompting SALT Republicans to aggressively push for its protection and expansion.
Leading the charge is Rep. Mike Lawler (R-NY). Last week, he reintroduced the SALT Fairness and Marriage Penalty Elimination Act. The legislation would increase the deduction cap to $100,000 for single filers and $200,000 for married couples. A more modest proposal increasing the deduction cap to $20,000 for single and joint filers is being floated as a more palatable alternative. Operating with a razor thin majority, House Republicans will be forced to agree on a number which satisfies both SALT Republicans and deficit focused lawmakers who represent states which do not require use of the SALT deduction.
In a statement to reporters, Rep. Nicole Malliotakis (R-NY) stated that the central priority for blue-state Republicans is increasing the deduction cap. “Any increase, whether it’s going to be doubling it, or tripling it, or quadrupling it, is a win.” NLBMDA supports legislation which reduces the federal tax burden for individuals who conduct business in areas with high state and local taxes. “Increasing the SALT deduction cap will have a positive impact for LBM dealers who operate in high-tax states” said NLBMDA President & CEO Jonathan Paine. “Expanding SALT relief will lower the cost of doing business and will help to alleviate an excessive tax burden faced by many in our industry.”
As negotiations continue to ramp up, NLBMDA will continue its advocacy efforts and keep members informed on the latest developments as details of the tax bill begin to be unveiled. For questions, please contact NLBMDA’s Government Affairs Coordinator, Matthew Delaney: MDelaney@dealer.org.
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