New York Gov. Andrew Cuomo (D) said Wednesday that his state would sue over the new tax law, which he has said could harm his state through its limit on the state and local tax deduction.
“We believe it is illegal, and we will challenge it in court as unconstitutional,” Cuomo said during his State of the State address. He called the law “the first federal double taxation in history, violative of states’ rights and the principle of equal protection.”
The new tax law caps the state and local tax (SALT) deduction at $10,000, which has been a particular concern for elected officials in New York and other high-tax states.
“Washington’s tax plan now uses New York and California as piggy banks to finance tax cuts for Republican states,” Cuomo said. He added that the law could cause people to leave New York and could make it harder to attract new businesses to the state.
The lawsuit is part of a three-pronged approach for addressing the tax law that Cuomo outlined in his speech.
Cuomo said that New York would also launch a lobbying campaign to repeal and replace the law.
And he said that for the third prong, the state government is “developing a plan to restructure” the state’s tax code. This restructuring could reduce New York’s reliance on an income tax and shift toward a payroll tax system. It could also include the creation of new charitable organizations for which contributions would be deductible.
“It is complicated, it is difficult, but it is clear that we must protect New York taxpayers from this [federal] assault,” Cuomo said.
Cuomo also touted cuts to state income taxes for middle-class taxpayers that the state legislature has passed in recent years. And he called the high property taxes in New York “an economic cancer” and said that local governments should increase their efforts to reduce costs.