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Committee Statement to Assembly Resolution No. 193 - Assembly Commerce and Economic Development (October 21, 2020)

Summary

A statement of the Assembly Commerce and Economic Development Committee to the Assembly on Assembly Resolution No. 193 of the State of New Jersey, dated October 21, 2020. The committee reports the resolution favorably. The resolution urges the federal government to raise the state and local tax (SALT) deduction to $25,000. The statement says the federal Tax Cuts and Jobs Act capped the SALT deduction at $10,000 for most filers beginning in tax year 2018. It describes New Jersey as a donor state and says that in 2014, over 41 percent of New Jersey residents who filed federal income tax returns and itemized claimed the SALT deduction.

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“Committee Statement to Assembly Resolution No. 193 - Assembly Commerce and Economic Development (October 21, 2020).” Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/2020-10-21-ace-ar193-s1-556b5f3754/, SHA-256 c680b69d0067a85d2d07233287785a13ee4fc72a9154149ec949cfda81164249.

Full text

ASSEMBLY COMMERCE AND ECONOMIC DEVELOPMENT
                COMMITTEE

                         STATEMENT TO

         ASSEMBLY RESOLUTION No. 193

       STATE OF NEW JERSEY
                         DATED: OCTOBER 21, 2020

          The Assembly Commerce and Economic Development Committee
      reports favorably Assembly Resolution No. 193.
          This resolution urges the federal government to raise the state
      and local tax (SALT) deduction to $25,000. Since 1913, Americans
      have had the option of using the SALT deduction when they file
      their federal income tax returns. Under the SALT deduction, federal
      taxpayers who itemize on their returns, rather than claim the
      standard deduction, may deduct state and local real estate and
      personal property taxes as well as either state and local income or
      sales taxes.
          New Jersey is a “donor state,” meaning that the State pays more
      in federal taxes than it receives in federal funding. The SALT
      deduction provides an indirect federal subsidy to states such as New
      Jersey by decreasing the net cost of nonfederal taxes to those who
      pay them. In 2014, over 41 percent of New Jersey residents who
      filed federal income tax returns and itemized their taxes claimed the
      SALT deduction on their returns.
          The federal “Tax Cuts and Jobs Act,” Pub.L. 115-97, which was
      enacted in December 2017, capped the SALT deduction to $10,000
      for most filers beginning in tax year 2018. Given the enormous
      fiscal benefits that the SALT deduction provides to New Jersey
      residents and the State, and given the disparity in the amount that
      New Jersey residents pay in federal taxes in comparison to the
      amount that they receive in federal funding, the federal government
      should raise the SALT deduction to $25,000.

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