Bill Text: NJ AR163 | 2020-2021 | Regular Session | Introduced
Bill Title: Urges Congress to waive 2019 state and local tax deduction caps in light of COVID-19 pandemic.
Spectrum: Slight Partisan Bill (Republican 3-1)
Status: (Introduced - Dead) 2020-06-01 - Introduced, Referred to Assembly Appropriations Committee [AR163 Detail]
Download: New_Jersey-2020-AR163-Introduced.html
Sponsored by:
Assemblywoman BETTYLOU DECROCE
District 26 (Essex, Morris and Passaic)
Assemblyman DANIEL R. BENSON
District 14 (Mercer and Middlesex)
Assemblyman BRIAN BERGEN
District 25 (Morris and Somerset)
SYNOPSIS
Urges Congress to waive 2019 state and local tax deduction caps in light of COVID-19 pandemic.
CURRENT VERSION OF TEXT
As introduced.
An Assembly Resolution urging Congress to waive the state and local tax deduction caps for 2019 in light of the COVID-19 pandemic.
Whereas, COVID-19 is a novel coronavirus that has caused a global pandemic leading to unprecedented and overwhelming health and economic crises throughout the United States; and
Whereas, The State of New Jersey has been one of the states with the highest incidence of COVID-19 in the United States; and
Whereas, The public health crisis caused by the COVID-19 pandemic has caused New Jersey to enact mandatory business closures and social distancing measures; and
Whereas, These necessary measures have led the State to take in substantially less revenue in income, sales, and corporate business taxes; and
Whereas, New Jersey residents, who already pay some of the highest tax rates and cost of living expenses in the country, are financially struggling in the wake of the COVID-19 pandemic; and
Whereas, The Treasury Department and Internal Revenue Service extended the 2019 federal income tax filing due date to July 15, 2020; and
Whereas, The state and local tax (SALT) deduction allows taxpayers of high-tax states to deduct local tax payments on federal tax returns, such as property, income, and sales taxes; and
Whereas, Historically, 41 percent of New Jersey tax filers claim the deduction for state and local taxes on their federal tax returns; and
Whereas, The federal "Tax Cuts and Jobs Act of 2017" instituted a cap on the SALT deduction with a maximum deduction of $10,000 per return for single filers, head of household filers, and married taxpayers filing jointly and a maximum deduction of $5,000 for married taxpayers filing separately; and
Whereas, In conjunction with the COVID-19 pandemic, the SALT deduction caps may lead to further economic stresses throughout the State and may even prompt some residents to leave the State altogether; and
Whereas, Because of the State's already existing economic difficulty and its further exacerbation caused by the COVID-19 pandemic, along with the State's longstanding fiscal issues such as high taxation, New Jersey taxpayers need economic relief now more than ever; now, therefore,
Be It
Resolved by the General Assembly of the State
of New Jersey:
1. This House urges Congress to waive the state and local tax deduction caps for 2019 taxable year in light of the COVID-19 pandemic.
2. Copies of this resolution, as filed with the Secretary of State, shall be transmitted by the Clerk of the General Assembly to the offices of the Majority and Minority Leaders of the United States Senate and the offices of the Speaker and Minority Leader of the United States House of Representatives.
STATEMENT
This resolution urges Congress to waive the State and Local Tax (SALT) deduction caps for 2019 in light of the COVID-19 pandemic.
COVID-19 is a novel coronavirus that has caused a global pandemic leading to unprecedented and overwhelming health and economic crises throughout the United States, particularly in the State of New Jersey which has had one of the highest incidences of COVID-19 in the United States. The public health crisis caused by the COVID-19 pandemic has led New Jersey to enact mandatory business closures and social distancing measures which, in turn, have led the State to take in dramatically less revenue in income, sales, and corporate business taxes.
New Jersey residents pay some of the highest tax rates in the country, along with paying very high cost-of-living expenses. The SALT deduction allows taxpayers of high-tax states to deduct local tax payments on federal tax returns, such as property, income and sales taxes. Historically, 41 percent of New Jersey tax filers claim the deduction for state and local taxes on their federal tax returns. The federal "Tax Cuts and Jobs Act of 2017" instituted a cap on the SALT deduction with a maximum deduction of $10,000 per return for single filers, head of household filers, and married taxpayers filing jointly and a maximum deduction of $5,000 for married taxpayers filing separately. The loss of the SALT deduction has had an especially significant impact on the residents of states that send more money to the federal government than the states receive from the federal government, such as New Jersey.
In conjunction with the COVID-19 pandemic, the SALT deduction caps may lead to further economic stresses throughout the State and may even prompt some residents to leave the State altogether. Because of the State's already existing economic difficulty and its further exacerbation caused by the COVID-19 pandemic, along with the State's longstanding fiscal issues such as high taxation, New Jersey taxpayers need economic relief now more than ever. Therefore, the SALT deduction caps should be waived for the 2019 taxable year.
