4 States Appeal Rejection of Tax Overhaul Lawsuit

Four states want a federal appeals court to revive their lawsuit challenging the federal tax overhaul that limited how much can be deducted in state and local taxes.

New York, New Jersey, Connecticut and Maryland filed a notice of appeal Tuesday to ask the 2nd U.S. Circuit of Appeals to look at a judge’s rejection of their claims. A judge dismissed the lawsuit in September, saying the states failed to show that a $10,000 cap on the deduction was unconstitutionally coercive.

The four states sued the U.S. Treasury secretary and the Internal Revenue Service in July 2018, saying the cap was unconstitutional because it interferes with states’ sovereign choices.