Tax overhaul lawsuit filed by NY, NJ, CT dismissed

NEW YORK (AP) — A federal judge in New York has ruled that the 2017 federal tax overhaul’s cap on state and local tax deductions was not an “unconstitutional assault” on the sovereignty of high-tax Democratic-leaning states.

Judge J. Paul Oetken dismissed a challenge on Monday to the Republican-led tax overhaul filed last year by New York, New Jersey, Connecticut and Maryland.

The tax law capped a deduction for state and local taxes at $10,000. The four blue states sued Treasury Secretary Steven Mnuchin and the Internal Revenue Service, alleging that the cap was “an unconstitutional assault on states’ sovereign choices.”

Oetken said in his dismissal that the states failed to show that the cap was unconstitutionally coercive.

Democratic New York Gov. Andrew Cuomo said the plaintiffs “are evaluating all options including appeal.”

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