New Jersey Gov. Phil Murphy signed into law Friday the State and Local Tax Deduction to provide property-tax relief.
The law allows New Jersey municipalities to create charitable funds through which taxpayers can donate in exchange for a tax credit of up to 90 percent of their donation to reduce their property tax bill. The legislation will become law within 60 days.
This follows the U.S. Congress’ approval of President Trump’s tax plan in December that caps the state and local tax deduction at $10,000.
“It is no secret that New Jersey’s middle class will be taking it on the chin with a $10,000 state and local tax or SALT deduction,” Murphy said at the signing in East Rutherford. “Today, we are taking a step to restore the property tax relief that the new federal law is set to take away. We know that President Trump and the Republican leadership in Congress targeted states like New Jersey when they wrote this law. We know now that New Jersey will get the fifth-least benefits among all 50 states.”
“Forty-one percent of New Jersey households benefit from the SALT deductions,” he continued. “And they will now lose an average of $8,000 in federal tax deductions. It is to be clear a de facto tax hike on countless New Jersey households.”
Murphy said Trump and Congressional Republicans “cooked this up to benefit the states that were with him [in the 2016 election] instead of treating us fairly.”
State Sen. Paul Sarlo, D-36th District, and State Assemblyman John McKeon, D-27th District, sponsored the bill.