Resolutions aim to restore state and local tax deduction via the Congressional Review Act

Congressional Review Act (CRA) resolutions introduced in both houses of Congress on July 16 aim to allow states and local governments to let taxpayers donate more to charity in exchange for paying less in state and local taxes. The resolutions would repeal an Internal Revenue Service (IRS) regulation designed to prevent states and local governments from helping taxpayers avoid the limits placed on state and local tax (SALT) deductions by the Tax Cuts and Jobs Act of 2017. According to the IRS regulation, taxpayers lose some of their federal charitable tax deduction based on how much of a deduction their state or local governments provide. If the CRA resolutions pass, many residents of states and cities that charge higher taxes would pay less in federal income taxes.
 
Senate Minority Leader Chuck Schumer (D-N.Y.) and Representative Mikie Sherrill (D-N.J.) introduced companion resolutions that would undo the IRS regulation and attracted 61 Democratic cosponsors and 1 Republican cosponsor as of July 19.
 
Under the Congressional Review Act, the resolutions would need to pass both houses of Congress and receive President Trump’s signature to repeal the IRS regulation.
 
The Congressional Review Act (CRA) gives Congress a chance to review and reject any new regulatory rules created by federal administrative agencies. Since the law’s creation in 1996, 17 out of the over 90,767 rules published in the _Federal Register_ during that time have been repealed using the CRA. 13 additional attempts either failed to pass through Congress or were vetoed.
 



About the author

Jace Lington

Jace Lington is a staff writer at Ballotpedia and can be reached at jace.lington@ballotpedia.org

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