Lance to Gov. Murphy: Please Back State-Level SALT Fix

WASHINGTON, D.C. — Congressman Leonard Lance (NJ-07) authored a letter to Governor Phil Murphy today requesting the governor endorse Trenton legislation to repeal New Jersey’s $10,000 property tax deduction limit on state income tax filers.  Governor Murphy this week issued a ‘call to action’ to New Jersey mayors to encourage residents to make charitable contributions to their towns instead of paying property taxes.  Lance hopes the governor will support lifting the cap as well.

“Capping taxpayers’ deductions on SALT negatively and disproportionately affects New Jersey residents compared to residents from other states.  Repealing on the $10,000 property tax deduction for state income tax filers would alleviate some of that newly increased financial burden,” Lance wrote in his letter.  “I respectfully request your advocacy and support for legislation that would eliminate New Jersey’s $10,000 cap on deductions for property taxes on taxpayers’ state income tax returns.”

Sen. Joe Pennacchio (LD-26), introduced legislation (S413) that would expand the tax break to allow New Jerseyans to deduct all property taxes for their primary residences from their New Jersey gross income tax.

Lance was the leader in the U.S. House on retaining the state and local tax deduction during the tax reform debate.  Initial drafts of the legislation completely eliminated the state and local tax deduction, but Lance and colleagues waged a campaign to retain SALT in its entirety.  A $10,000 cap was instituted in the final product – mirroring the $10,000 property tax deduction for state income tax filers.  Lance and fellow New Jersey Representatives Chris Smith, Rodney Frelinghuysen and Frank LoBiondo agreed this was still too low for most New Jersey property taxpayers.  Lance believes the Pennacchio bill would result in meaningful tax relief.

Lance has also introduced bipartisan bills to address SALT including legislation reinstating SALT and a bill protecting tax filers that prepaid their property taxes in 2017.  Lance believes bipartisanship is the way to solve the SALT issues and reduce the property tax burden.  “Our State’s residents pay on average over $8,500 annually in property taxes, which is over 250% the national average,” Lance also pointed out. “I am confident that our combined efforts will bring tax relief to the citizens of New Jersey.”

Letter text:

The Honorable Phil Murphy

Governor of New Jersey

PO Box 001

Trenton, NJ 08625

Dear Governor Murphy:

I applaud your attention to the high tax burden New Jersey residents face and share your opposition to the new $10,000 cap on state and local taxes (SALT) individuals can deduct on their federal income tax returns.  I respectfully request your advocacy and support for legislation that would eliminate New Jersey’s $10,000 cap on deductions for property taxes on taxpayers’ state income tax returns.

New Jersey has the highest property taxes in the Nation.  Our State’s residents pay on average over $8,500 annually in property taxes, which is over 250% the national average.  Capping taxpayers’ deductions on SALT negatively and disproportionately affects New Jersey residents compared to residents from other states.  Repealing on the $10,000 property tax deduction for state income tax filers would alleviate some of that newly increased financial burden.

I have led bipartisan efforts on Capitol Hill trying to reinstate the full deductibility of SALT.  I have authored and cosponsored several pieces of legislation aimed at providing relief from this deleterious cap with my colleague, Congressman Josh Gottheimer.  I am confident that our combined efforts will bring tax relief to the citizens of New Jersey.

Thank you for considering my request.  I look forward to working with you on this issue of vital importance to New Jersey residents.  Best personal wishes.

Sincerely,

Leonard Lance

Member of Congress