SCOTUS swats away SALT cap challenge that limits tax deductions in New York, Maryland

The Supreme Court Monday rejected an appeal from several states challenging Congress's cap on state and local taxes that can be deducted from federal taxable income.

"Congress’s taxing authority (as set forth in Article I, Section 8 and the Sixteenth Amendment) is cabined by the structural requirements of federalism, which prevent the federal government from directly interfering with the States’ ability to generate revenue to sustain their operations," the states said in a March court filing. "The long history of federal income taxation demonstrates that Congress and the States equally understood that a deduction for all or nearly all state and local property and income taxes was constitutionally required to preserve state sovereign taxing authority."