SCHUMER UNVEILS NEW EFFORT TO RESTORE NYS’ ABILITY TO ‘WORKAROUND’ PART OF FED TAX LAW THAT TAKES AIM AT LI BY ELIMINATING A HOMEOWNERS’ SALT TAX DEDUCTION, COSTING THEM TENS-OF-THOUSANDS; SENATOR WILL DEPLOY SPECIAL LEGISLATIVE POWER TO OVERTURN IRS RULE & ONCE AGAIN MAKE LI’ERS ELIGIBLE FOR FULL SALT DEDUCTION

State Had Passed Law To Allow School Districts & Local Governments To Create Charitable Fund In Lieu Of Tax Payments, Which Would Have Allowed Homeowners To Retain Full SALT Deduction, But IRS Swooped In And Used Regs To Squash That Fed Workaround Entirely

Senator’s Congressional Review Act (CRA) Power Would Force A Vote To Overturn The IRS’ Block Of State Workaround; Avg SALT Deduction Is Around $20K Across 690K Households On The Island

Schumer: There Is One More Rabbit In The Hat When It Comes To Making Unfair IRS Regs Disappear, And I’m Going To Use It    

As LI homeowners wait with bated breath to learn the fate of a critical tax deduction they rely upon, U.S. Senator Charles Schumer is unveiling a new effort to restore New York State’s ability to work-around the part of the federal tax law that takes an unfair aim at the Island by eliminating a homeowners’ SALT tax deduction, costing them tens-of-thousands of dollars. Schumer explained that just as New York State was tying the bow on its workaround plan by passing a law that circumvented the feds, the IRS swooped in and used regulations to squash everything, adding insult to injury for local homeowners. Therefore, Schumer, today, announced he will use a special legislative power provided under the Congressional Review Act (CRA) Resolution of Disapproval to overturn that bad and recent IRS decision in hopes of once again making LI’ers eligible for their full SALT deduction. Local backers of the new plan include area homeowners, and Supervisors Gillen, Bosworth and Saladino.

“While none of us have a magic wand to wave and undo the nasty tax predicament the federal government has cast on Long Island, there is one more veritable rabbit in the hat Congress can use to make this unfair IRS rule disappear, and I am announcing today, that I’m going to use it,” said U.S. Senator Charles Schumer. “The special legislative power comes from the Congressional Review Act (CRA) and tomorrow I will drop what is called a ‘Resolution of Disapproval’ to overturn the recent IRS decision that blocks New York State from implementing its workaround plan to allow Long Islanders to claim their rightful SALT deduction. New York State had a smart plan, and the IRS shot it down, but not all is lost."

Schumer explained that he can use the special legislative power, provided for under the Congressional Review Act, in an attempt to nullify the recent IRS decision that blocks New York State from working around the provision in the federal tax law that strips Long Island homeowners from claiming their full SALT tax deduction. The disapproval resolution under the CRA gives Congress the power to expeditiously review any new federal regulation, like the recent IRS decision that hurts Long Island, so long as the CRA disapproval resolution is filed within 60 legislative days of the regulation being finalized. Schumer will file the disapproval resolution tomorrow in Washington. Schumer said the use of the CRA power is comparable to declaring a policy emergency, and when it comes to the SALT deduction on Long Island, the issue is serious.

The CRA legislative review is not held to the 60-vote requirement to pass the Senate, Schumer added, making it an attractive plan in this anti-New York era. Schumer reiterated just how serious the SALT issue is across Long Island. Just a few years ago, Long Island homeowners took an average SALT deduction of $20,000. And more than 690,000 households benefited. He pointed to Long Island’s Congressional districts as he made his case and launched this nationwide push:

Under the pre-Trump tax code, taxpayers who itemized deductions on their federal income tax returns could deduct state and local real estate and personal property taxes, as well as either income taxes or general sales taxes. State and local income and real estate taxes had made up approximately sixty percent of local and state tax deductions while sales tax and personal property taxes made up the remainder. According to the Tax Policy Center, approximately one-third of tax filers had itemized deductions on their federal income tax returns. The mortgage interest tax deduction had allowed borrowers to deduct the interest paid on their home loans from their income taxes.

“Taking away the SALT deduction was brutally unfair to Long Island homeowners and hit ‘em right between the eyes, and now the IRS has added insult to injury, and that’s why we have to keep fighting,” added Schumer.

“The elimination of SALT deductions is a slap in the face and a punch in the gut that will have devastating impacts on the local housing market, which will then trickle down into every facet of our local economy," said Hempstead Town Supervisor Laura Gillen. “That’s why this work around is critical for the survival of Long Island’s middle class, which sorely depends on this exemption to makes ends meet. Long Islanders already give far more to Washington than we get back, so paying anything more than our fair share is not an option.”

“From the start, it seemed quite obvious that the $10,000 SALT cap was just a bad idea, especially for Long Island homeowners. We have some of the highest property taxes in the country, so setting the limit at $10,000 for deductions, hits our local taxpayers particular hard. This is a financial assault on our communities from the north shore to the south. It’s hitting the pocket books of average, hardworking, two-income families who make their home here,” said North Hempstead Town Supervisor Judi Bosworth.

“The elimination of SALT deductions hurt the wallet of all Long Island families. Our residents must be able to deduct those taxes on their Federal return. I commend Senator Schumer for his efforts to overturn the IRS ruling that state credits cannot be used to preserve the SALT deduction and urge Congress to restore these deductions to help the middle class who are most impacted by their loss,” said Oyster Bay Town Supervisor Joseph Saladino.

“The loss of the federal deduction for SALT inequitably and negatively impacts our region, and thus I commend Senator Schumer for his efforts to protect Long Island, the business community and our homeowners,” said Kevin Law, President and CEO, Long Island Association.

"If one sought to devise a strategy that would derail a region that helps power New York’s economy, is a center of technology innovation and education excellence, one could not come up with a better weapon of mass destruction than the loss of property tax deductions. Senator Schumer’s staunch defense of SALT deductions reflects his understanding of what’s at stake and how crucial it is that the deduction is restored quickly before irreparable harm is done to individual homeowners and the region as a whole," said Laureen Harris, President, Association for a Better Long Island. 

Schumer said the recent IRS decision to block the workaround is unfair to Long Island, where the rate for home ownership is 80 percent and the cost of living is high. For instance, according to the NYS Department of Taxation and Finance, the median residential home sale price in Nassau County was $445,000 in 2015; in Suffolk County the median residential home price was $360,000 in 2015. ?According to the Tax Policy Center, between 2007 and 2011, the average annual property tax burden was $9,080 in Nassau County and $7,600 in Suffolk County. According to the IRS, in 2014, approximately 1.9 million New Yorkers filed for the mortgage interest deduction each year. 

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