New York Republicans want SALT debate in tax bill discussion

A New York Republican is trying to drum up support to allow a debate on raising the state and local tax deduction cap as bipartisan tax package negotiations leave out those proposals.

Rep. Nick LaLota (R-N.Y.) is circulating a letter asking Speaker Mike Johnson (R-La.) to move any tax package through what’s known as “regular order” so members can debate an amendment that would raise the SALT cap. The 2017 Republican tax law instituted a $10,000 limit on deductions for state and local taxes, which has drawn opposition from New York, New Jersey, and California Republicans as well as some Democrats.

Lawmakers have been nearing a deal on a bipartisan tax bill that would revive some expired business breaks and expand the child tax credit.

Backlash from SALT Republicans is the latest hurdle the potential agreement faces. In recent days, Democrats are demanding more for the child tax credit, and others want to see an expanded low-income housing tax credit also in the bill.

Any potential provision addressing the SALT cap faces an uphill battle to passage as some members from both parties oppose raising the $10,000 limit.

LaLota wrote that the tax bill shouldn’t be considered under suspension of the rules, a procedure in the House that would streamline action on legislation by prohibiting floor amendments. High-tax-state Republicans previously pushed amendments to raise the SALT cap in talks over the GOP tax package as well as debt limit negotiations.

“When our party presents a bill considering a plethora of tax provisions, our party’s leadership should, at a minimum, simultaneously facilitate a debate on a SALT amendment,” LaLota wrote in the letter. “Bringing the aforementioned bill under suspension would stifle such a debate and suppress the voices of the constituents we represent.”

LaLota told Bloomberg Tax that a wide range of potential amendments raising the SALT cap could be debated, including Rep. Mike Lawler’s (R-N.Y.) bill that would double the cap to $20,000 for married couples or LaLota’s bill that would raise the limit to $80,000 for individuals.

Rep. Nicole Malliotakis (R-N.Y.), a member of the House Ways and Means Committee, said the best time to for New Yorkers to try to address the SALT cap is in 2025, when the limit expires along with a swath of other provisions from the 2017 tax law. Malliotakis said it’s a tough call, but ultimately a leadership call, on whether or not to bring up a tax bill via suspension of the rules.

“It’s a Catch-22,” Malliotakis said. “If you bring it up by suspension, you can’t have the amendment, but if you bring it up by regular order, then you risk it not being able to pass the House.”Rep. Anthony D’Esposito (R-N.Y.) told Bloomberg Tax Thursday that he’s signing on to LaLota’s letter and reiterated he won’t support a tax package without SALT cap changes. Any “relief,” would be helpful, D’Esposito said.

“I’ve been very realistic throughout this entire process,” D’Esposito said. “Anything that provides relief to taxpayers back home, any relief is good relief.”