NY lawmaker aims for SALT expansion

A New York lawmaker aims to reopen negotiations to expand the state and local tax deduction after US lawmakers raised the cap on the break to $40,000 last year — if Congress attempts to pass a second tax bill before the midterm elections.

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Representative Nick LaLota, a Republican from Long Island, is trying to extend that threshold past five years, when the cap is expected to revert back to $10,000. He said he wants to make changes to secure more benefits related to the SALT deduction if the GOP’s spending bill involves modifications to the Tax Code.

“I will always fight for my constituents and America and will fight for more SALT” if the Tax Code is materially revisited, LaLota said. 

The SALT deduction was a key point of negotiation during the crafting of a must-pass tax bill last year because several House Republicans representing districts in high-tax states like New York, New Jersey and California pushed for raising the cap. The break is especially lucrative in those areas due to high incomes, property values and local taxes. 

Later this month, Republican leaders in Congress plan to begin work on a partisan fast-track spending bill that can bypass a Senate Democratic filibuster by adhering to special procedures. Senate Majority Leader John Thune said he wants to keep the bill narrowly focused on providing multiple years of funding for immigration enforcement and border security, but lawmakers are hankering to add their priorities to the mix. House Ways and Means Chairman Jason Smith has said that tax provisions could be included.

Last year, LaLota was joined by New Yorkers Andrew Garbarino and Mike Lawler, New Jersey Representative Tom Kean and California’s Young Kim, who threatened to upset the slim Republican margin if the SALT cap wasn’t raised. 

Garbarino, who chairs the SALT caucus, said in a statement that he was “proud” of the progress made on tax relief, though he’s now focused on addressing other priorities for his constituents. Lawler, Kim and Kean did not respond to requests for comments. 

Meanwhile, Nicole Malliotakis, New York City’s only Republican in Congress, said that “all of us in SALT-affected states would like to see the deduction stay beyond the five years,” noting that she had pushed for a 10-year window for the deduction, but was overruled by other lawmakers who secured a higher cap but with a faster sunset.

The vast majority of Republicans oppose additional SALT relief, which they see primarily benefiting high-tax, Democratic-led states, but even one lawmaker could complicate the increasingly narrow Republican margin. 

The Trump administration promised supercharged refunds this tax season thanks to last year’s budget law, predicting a $1,000 increase to average refunds. So far, refunds have averaged $350 higher than the same point last year, falling short of the administration’s lofty forecasts.