Judge rules against New Jersey, other states on SALT lawsuit

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A federal judge has ruled against New Jersey and three other states in a lawsuit against the IRS.

California, Connecticut, New Jersey and New York filed the lawsuit in response to the Trump administration’s 2017 tax reform and a cap on state and local tax (SALT) deductions at $10,000.

A New York federal court judge dismissed the case Monday, saying that the states failed to show that the SALT caps were unconstitutional.

In response, the to 2017 tax reform, New Jersey and the other states changed their laws to allow taxpayers to donate to charitable funds in exchange for tax credits. But the IRS said that this was not allowed.

RELATED: New Jersey sues Trump administration over tax workaround 
MORE: Click here to read the judge's decision

Gov. Phil Murphy said on News 12 New Jersey’s “Ask Gov. Murphy” program that he plans to fight this decision.

“There’s precedent in 33 other states to a very similar construct to the one that we proposed, so I think that this is a wrong-headed conclusion,” Murphy said.

The governor said that he feels that the $10,000 caps is aimed at states like New Jersey which lean politically opposite of President Donald Trump.

“This is a willful attempt by the Trump administration to hurt our property taxpayers and our property owners,” Murphy said.

Democratic Rep. Josh Gotthiermer posted on Twitter that he is working to fully reinstate the SALT deduction.

 

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