The House Rules Committee on Thursday advanced a bill that could provide some added relief on state and local tax deductions, or SALT.
"The cap itself sunsets in  and so I think the feeling at the moment is, we're going to advocate for what we think we can achieve to make a meaningful step toward providing relief as relates to state and local taxation," Republican U.S. Rep. Marc Molinaro said.
The committee approved the measure that would lift a cap on deductions for joint filers on their 2023 tax filings.
Congress is currently working on a bipartisan tax package, which would expand the child tax credit and restore certain tax breaks for businesses. But several New York Republicans, including some representing swing districts, warned they would not vote for the bill if SALT is not also addressed. On Tuesday, four New York Republicans temporarily voted against a procedural step on the House floor, stalling legislative action as part of their demand for SALT relief.
The current $10,000 cap was imposed as part of former President Donald Trump’s 2017 tax overhaul. Limiting the deduction disproportionally hurts taxpayers in blue states like New York, where property and state income taxes are relatively high.
If the new measure goes to the floor, it could have some Democratic supporters as well.
"I think this is the closest we've been to a bipartisan agreement on SALT deduction, bringing them back, eliminating double taxation, closest we've been since this bad policy was put in place, so I would absolutely support it," Democratic U.S. Rep. Pat Ryan said.
The SALT cap has also emerged as an issue in the special election to replace ousted Rep. George Santos in Queens and Nassau County, which takes place on Feb. 13. Both candidates for the seat have called for SALT relief.