Moving the Trump administration's signature tax bill out of the House required hard won support from the SALT caucus who will now pass judgment on the Senate's changes to the provision.
The president's massive tax and spending cut reconciliation bill originally passed the House on a 215-214 vote, a narrow margin that relied on the SALT caucus, a handful of House Republicans who insist on increasing the $10,000 cap on the federal income tax deduction for state and local taxes.
There's little margin to lose that support in getting the Senate's version passed by the House.
"My team and I are reviewing all 887 pages of the Senate bill," Rep. Nick LaLota R-N.Y. said
"Early analysis: middle-class Long Island families could see a $6K+ fed'l tax cut next year—$5K from the higher $40K SALT deduction. We're closely analyzing other issues re nat'l deficit, health care, SNAP & energy."
The SALT cap has been controversial since it was enacted as part of 2017 Tax Cuts and Jobs Act during the first Trump presidency.
Some municipalities favor raising or eliminating the cap as they believe it infringes on their abilities to levy taxes.
SALT is also not popular in states with high income and property taxes.
The Senate and the House agree on raising the deduction from $10,000 to $40,000 but the Senate version phases the provision out in 2030.
As the debate over SALT once again comes to the fore analysts are drilling into the numbers to uncover the effects.
According to the Tax Policy Center of the Urban Institute & Brookings Institution, the Senate version of the bill will cut 2026 taxes by an average of $2,900 as compared to the current level.
"The current Senate version of the One Big Beautiful Bill Act would distribute most of those additional tax cuts to the highest-income households. The main reason: the way it treats the state and local tax deduction,"
The Senate version also reverses the House's position on workarounds known as pass-through entity exemptions that allow business owners to take their income through their companies which triggers a state tax credit that helps offset the SALT cap. The Senate bill leaves them intact
The House provision was considered especially onerous by
"That workaround allows these business owners to fully deduct their state and local taxes by paying the levies through their firms," said the Tax Policy Center.
Thirty-five states and New York City have enacted various forms of the workaround.
According to the Committee for a Responsible Federal Budget, when considering the effects of keeping the pass-through exemptions in place and proposed changes to the alternative minimum tax, the cost of Senate's version of the bill is estimated at a net of
