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Bill

AR 38

Urges Congress to reinstate unlimited state and local tax deduction.

2026-2027 Regular Session Introduced by Gerry Scharfenberger

New Jersey urges Congress to restore unlimited deductions for state and local taxes, reversing the $10,000 annual cap imposed in 2017.

Introduced, Referred to Assembly Oversight, Reform and Federal Relations Committee
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Bill Summary · AR 38

Legislative bill overview

AR 38 is a resolution urging the U.S. Congress to reinstate the unlimited State and Local Tax (SALT) deduction, which was capped at $10,000 annually by the 2017 Tax Cuts and Jobs Act. The bill represents New Jersey's legislative position on federal tax policy, specifically requesting that Congress restore full deductibility of state and local taxes paid by individual taxpayers.

Why is this important

The SALT deduction cap disproportionately affects high-tax states like New Jersey, where combined state and local tax burdens often exceed $10,000 annually for middle and upper-income residents. Reinstating unlimited deductions could reduce the effective tax burden on New Jersey residents and potentially affect state revenue discussions, as federal tax policy influences taxpayers' decisions about where to live and work.

Potential points of contention

  • Regressive impact: Unlimited SALT deductions primarily benefit higher-income earners in high-tax states, raising equity concerns about whether federal policy should subsidize wealthy residents of specific states
  • Federal revenue trade-offs: Reinstating unlimited deductions would reduce federal tax revenue, requiring offsetting measures or increasing the deficit
  • Geographic fairness: Low-tax states argue that subsidizing high-tax states through federal deductions is inequitable, as their residents receive fewer deduction benefits

Compiled from official sources — confirm details with the bill’s official record.

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