Sherill, Gottheimer and King Move to Keep Treasury From Blocking Charitable Contributions

August 10, 2019 by Sean Trambley

Representatives Mikie Sherrill, D-N.J., Josh Gottheimer, D-N.J., and Peter King, R-N.Y., have introduced H.J. Res. 72 to overturn U.S. Treasury Department regulations that bar the deduction of charitable contributions from federal taxes. 

The bipartisan action comes after the Treasury, in June, barred municipalities from creating work arounds to help residents negatively affected by the 2017 state and local tax (SALT) deduction cap. 

The Congressional Review Act of 1996 (CRA) establishes procedures by which the House and Senate may strike down regulations issued by federal agencies. Agencies still wishing to enforce the regulation are then given 60 days to submit it to Congress for its consideration. 

If the disapproval resolution is passed by both chambers, the rule cannot take effect and the agency is barred from issuing a substantially similar rule without subsequent statutory authorization.

The 2017 Tax Cuts and Jobs Act imposed a $10,000 cap on federal income tax deductions for state and local taxes. The state and local tax deduction cap impacts 11 million Americans who were unable to deduct more than $323 billion in state and local taxes.

“The state and local tax deduction cap has placed a significant burden on residents in my community,” Representative Sherrill said. “I hear it from parents who wonder how they are going to afford to send their kids to college and teachers who ask me how they can continue to make New Jersey their home. The U.S. Treasury Department’s wrongheaded decision to bar states from utilizing charitable deductions impacts Americans across the country. It was done without congressional input and our resolution will give power back to states like New Jersey to address the high cost of living — only made worse by the loss of the full SALT deduction in 2017.”

“I have continued to hear from cities and towns across the Fifth District that the Treasury Department’s regulatory overreach is stopping them from being able to provide actual tax relief for our hardworking Jersey families. With today’s bipartisan resolution, I’m digging in and fighting back with Rep. Sherrill, and with our colleagues in the Senate like Sen. Schumer, Sen. Menendez, Sen. Booker, and so many others,” said Representative Gottheimer. “Simply put, Congress didn’t give the IRS permission to interpret the tax law as they see fit. Today’s resolution builds upon all of my efforts to, once and for all, give people the tax cuts they need and deserve.”

Full text of the House Resolution can be viewed here

Forty-Seven Members of the U.S. House of Representatives joined as original co-sponsors, and Members of the U.S. Senate introduced a companion resolution.

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