Sponsored by:
Assemblyman GORDON M. JOHNSON
District 37 (Bergen)
Assemblywoman LISA SWAIN
District 38 (Bergen and Passaic)
Assemblyman P. CHRISTOPHER TULLY
District 38 (Bergen and Passaic)
Co-Sponsored by:
Assemblywoman Vainieri Huttle
SYNOPSIS
Urges President and Congress to raise cap on state and local tax deduction.
CURRENT VERSION OF TEXT
As introduced.
A Joint Resolution urging the President of the United States and the United States Congress to raise the current cap on the state and local tax deduction.
Whereas, American taxpayers have had the option of offsetting the amount of federal taxes owed on their federal tax returns through the use of the state and local tax (SALT) deduction for over 100 years; and
Whereas, Utilizing the SALT deduction, federal taxpayers who itemize deductions, as opposed to claiming the standard deduction, may deduct the amount of state and local real estate and personal property taxes paid, as well as either state and local income taxes paid or sales taxes paid; and
Whereas, In 2014, over 41 percent of New Jersey residents who filed federal income tax returns claimed the SALT deduction on their returns; and
Whereas, The SALT deduction also provides a benefit to residents of states such as New Jersey by decreasing the amount of federal taxes owed by those residents; and
Whereas, In December 2017, under the federal “Tax Cuts and Jobs Act,” Pub.L. 115-97, the federal government capped the amount of the SALT deduction at $10,000 for most filers beginning in tax year 2018; and
Whereas, In the 2017 tax year, the average SALT deduction taken in New Jersey was $19,089; and
Whereas, In 2018, the State of New Jersey only received 79 cents back for every dollar paid by its residents in federal taxes, the least amount received back from the federal government by any state; and
Whereas, New Jersey is considered to be a “donor state” because New Jersey residents pay more in federal taxes than the State receives back in federal funding; and
Whereas, In light of the substantial financial benefits that the SALT deduction provides to New Jersey residents, as well as the significant disparity between the amount that New Jersey residents pay in federal taxes and the amount the State receives back in federal funding, the President of the United States and the United States Congress should act to raise the current cap on the SALT deduction; now, therefore,
Be It Resolved by the Senate and General Assembly of the State of New Jersey:
1. The Governor and the
Legislature of the State of New Jersey hereby urges the President of the United
States and the United States Congress to raise the current cap on the state and
local tax deduction.
2. Copies of this resolution as filed by the Secretary of State shall be transmitted by the Clerk of the General Assembly or the Secretary of the Senate to the President and Vice President of the United States, the Majority and Minority Leaders of the United States Senate, the Speaker and the Minority Leader of the United States House of Representatives, and every member of the United States Congress elected from the State of New Jersey.
3. This joint resolution shall take effect immediately.
STATEMENT
This resolution urges Congress and the President to raise the current cap on the state and local tax (SALT) deduction. For over 100 years, the SALT deduction has been available to American taxpayers. The SALT deduction allows federal taxpayers, who itemize on federal income tax returns, the option to deduct payments for state and local taxes from federal income tax liability. This deduction is a significant benefit to New Jersey residents who pay federal taxes. In 2017, the federal government limited the amount of the SALT deduction to $10,000, whereas the average SALT deduction taken by New Jersey taxpayers was almost double that amount.
New Jersey is considered to be a “donor state” because the amount of federal taxes paid by New Jersey residents exceeds the amount that the State receives back in federal funding. In 2018, the State of New Jersey received the least amount of federal funding of any state. The SALT deduction cap should be raised in order to remedy some of this tax disparity.