NACo releases new SALT deduction resource
Author
Paige Mellerio
Emma Conover
Upcoming Events
Related News
Key Takeaways
On January 13, NACo released profiles of the State and Local Tax deduction, illustrating the percentage of tax returns in a county with itemized deductions in 2021. This county-by-county map is released as the urgent issue of SALT takes the national stage. The $10,000 SALT cap is set to expire December 31, 2025, and counties urge Congress and the Administration to restore the full SALT deduction to restore fairness in taxation and preserve essential local services.
Explore how the SALT cap impacts your county here
What is the State and Local Tax deduction?
The SALT deduction allows taxpayers to deduct state and local taxes from federal taxes, promoting the intergovernmental balance of taxation. Since the first Federal Income Tax Form in 1913, SALT has been a founding principle to Federalism and intergovernmental roles. The 2017 Tax Cuts and Jobs Act (P.L. 115-97) capped the State and Local Tax (SALT) deduction at $10,000, ending the full deductibility of state and local taxes from federal taxes. Counties opposed this portion of the tax reform law and have been advocating to fully restore the SALT deduction ever since.
How does the State and Local Tax deduction impact counties?
Restoring the full SALT deduction is strongly tied to NACo’s long-standing national goal of promoting home ownership, as the overwhelming number of itemizers who claim SALT deduct property taxes and mortgage interest. With the current cap, homeowners are disadvantaged as landlords and certain corporations continue to fully deduct state and local taxes, including property taxes, as a business expense. With the current housing affordability crisis, counties call upon Congress to restore the full SALT deduction for all state and local taxpayers. To see a full list of county tax priorities in the 119th Congress, visit NACo’s Advocacy Toolkit.
Advocacy Toolkit: Counties and Tax Reform in the 119th Congress
Advocacy Toolkit: Municipal Bonds
Related News
NACo sends letter to congressional leadership urging SALT deduction reform
The letter urges Congress to raise the cap on the SALT Deduction, to provide relief to American families facing double taxation and reverse an unfair double standard
NACo endorsed advanced refunding bill introduced in the U.S. House
NACo endorsed this bill and supports counties’ ability to issue tax-exempt advance refunding bonds, which can save taxpayers millions of dollars.
U.S. Congress begins work on budget reconciliation process: What this means for counties
The House and Senate Budget Committees have marked up Fiscal Year (FY) 2025 budget resolutions to initiate the budget reconciliation process to enact policy priorities without garnering bipartisan support, although the two chambers differ in their approach to drafting the legislation.