SALT deduction

As the Senate-approved version of the reconciliation bill bounces back to the House, the SALT caucus that was key to its passage takes a look at SALT provision changes.

The Senate advanced the One Big Beautiful Bill Act through a procedural vote, opening the legislation for debate followed by Monday's vote-a-rama.

Working out the differences between the Senate and House budget bills might result in lawmakers reaching for ways to pay for extending tax cuts and finance new programs which could put tax-exempt munis back on the negotiating table.

Attorneys and muni advocates are concerned as the Senate reviews the budget reconciliation process against the "Byrd Rule."

Housing advocates are cheering the Senate's embrace of expanding Low Income Housing Tax Credits which ensures a volume increase and reduces a key bond threshold test.

As the Senate Finance Committee works on the the reconciliation puzzle, attorneys, accountants, and doctors are lobbying for keeping the pass-through exemptions that provide a workaround to the cap on state and local taxes in place.

The hard-fought increase to the cap on state and local tax deductions that was instrumental to passing the House GOP tax bill is under fire in the Senate.

The Senate returns to Washington with a ticking deadline clock to turn the House's One Big Beautiful Bill Act into law with questions remaining about the future of the SALT cap deduction and green energy tax credits.

As the budget reconciliation lurches through Congress towards a vote, the cap on state and local taxes remains a key bargaining chip while data shows state tax revenue declining and an uncertain future for the pass-through-entity workarounds adopted by more than 30 states.

Muni advocates are watching the SALT cap negotiations closely, as the outcome may be influence if other revenue raisers, like axing the muni tax exemption, come into play.

"As we head into reconciliation and tax negotiations, I'm making it clear: I won't support a bill that doesn't lift the cap," Rep. Mike Lawler said.

The House Committee on Transportation and Infrastructure is in the early stages of hammering out a surface transportation bill designed to prop up the Highway Trust Fund while House Ways and Means tinkers with a tax deal.

The Senate move provides an alternative pathway towards a final budget agreement as the House wrestles with an approach that could include key tax policy changes for the muni market.

The lobby trying to protect the tax exemption is working overtime as the threat appears very real.

A record-breaking year for bond issuance will likely be followed by another strong year for munis even as the threat of ending the tax-exempt status appears in writing within the halls of Congress.

Lifting the SALT cap is one of several thorny issues Republicans hope to iron out as part of a larger reconciliation bill by March.

Congressional observers are casting a skeptical eye about the productivity of the new 119th Congress that is already defined by ideological differences separating factions within the majority party.

The legislative track pursued by Republicans will set the timeline for the tax reform debate closely watched by the municipal market.

The new Congress will have a full plate including deciding the fate of the Tax Cuts and Jobs Act and Internal Revenue Service funding in a legislature that's already showing cracks of disagreement.

Economists gaming out the possibilities for tax policy in the Trump administration believe the bond market will dictate budget cuts and spending increases.