SALT Workarounds Spread to More States as Democrats Seek Repeal

Seven states, including California and Illinois, are poised to join nearly a dozen others like New York and New Jersey that have skirted around the federal cap on state and local tax deductions as the prospect of a federal fix remains elusive.

New York and Idaho both recently passed legislation to work around the controversial 2017 tax law feature known as the SALT cap. Their states created an optional tax, letting owners of passthrough entities—where income flows through and is taxed on the ownership level—circumvent the $10,000 limit on deductions. Georgia and Arizona are awaiting their governors’ approvals