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Trump calls SALT deduction-focused Republicans to Florida before tax fight

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A cohort of about 20 Republican House members from New York, New Jersey and California was invited to meet with President-elect Donald Trump at his Mar-a-Lago estate Saturday ahead of a looming fight over an extension of his 2017 tax cuts.

Much of the group is likely to attend and plans to discuss increasing the $10,000 cap on state and local tax deductions, which has disproportionately hurt voters in the three high-tax states, according to Representative Nick LaLota, who represents eastern Long Island in New York. 

Republicans in Congress are in the beginning stages of negotiating a package that will extend Trump’s 2017 tax cuts — including the future of the cap on the SALT deduction, which will otherwise expire — and address the other legislative priorities of immigration and energy production. The meeting is a positive sign for lawmakers seeking to expand the deduction, a politically divisive write-off that reduced tax bills for some residents of high-tax states.

In an interview with Bloomberg, LaLota said the group of lawmakers includes four other representatives who are banding with him to push for a “reasonable” adjustment to the cap on so-called SALT deductions. The cap was imposed as part of the 2017 bill.

“There are five very salty Republicans — I would expect that somebody in his position would appreciate that dynamic and would want to provide an accommodation to get the bill passed,” he said. “The five of us have the opportunity to effectuate an even more beautiful, big bill.”

The group, which also includes New Yorkers Andrew Garbarino and Mike Lawler, New Jersey Representative Tom Kean and California’s Young Kim, will push to expand the deduction — currently capped at $10,000 regardless of marital status — that would deliver big savings to their constituents as part of a larger tax package, said LaLota. 

While he declined to comment on what the group would consider to be an acceptable cap, last month he said that a potential plan by Trump’s economic advisors to double the tax write-off limit to $20,000 “is not reasonable.” He also told Bloomberg the removal of the so-called marriage penalty — the fact that the limit is the same for both single and married taxpayers — on its own would be insufficient for the “salty” five.

Spokespeople for Lawler, Garbarino and Kim confirmed their plans to attend the meeting with Trump, while Kean’s spokesperson didn’t respond to a request for comment. Spokespeople for Trump did not immediately respond to a request to comment.

“I’ve been very clear, and I think my colleagues will understand it, that SALT has to be included” in the bill, Lawler said in a separate interview Tuesday. “There’s already an understanding that that’s the case, so I’m not concerned.”

Because of its slim majority in the House, the GOP can only afford to lose the support of a couple congressional Republicans in order to advance the bill through a process known as budget reconciliation. The process, which would allow the GOP to pass legislation only with Republican votes, depends on near-universal agreement within its narrow majorities in the House and Senate. That puts great pressure on Trump and Republican leaders to negotiate a package that appeases both their far-right flank as well as members from the New York City-area and Southern California, for whom expanding the SALT deduction is a political priority.

“The math dictates that any small group of members can block anything that is going to be Republican,” he said. “And that math isn’t just particular to the SALT discussion, but just about anything and everything we do here in this town. That said, that President Trump is bullish on SALT and wants to provide a fix and is inviting us to Mar-a-Lago to be a part of that fix gives me great optimism.”

While it was Trump who curbed the tax break as part of his signature 2017 legislation, on the campaign trail he vowed to expand the cap. LaLota credited the change of heart to efforts by lawmakers to develop a relationship with Trump.

In addition to taxes, LaLota said that he and Lawler also plan on discussing with Trump New York City’s congestion pricing toll, which went into effect this week and charges drivers $9 for entering Manhattan’s central business district. Trump had said he opposes the fee.

LaLota said the toll especially hurts suburbanites from his and Lawler’s districts, who “should not be a piggy bank to the bloated MTA.”

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Extra tax filing time granted for Carter remembrance

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Taxpayers have an extra day, until Friday, Jan. 10, to file any return or pay tax originally due on Thursday, Jan. 9.

The IRS granted the time for the Jan. 9 National Day of Mourning for Jimmy Carter, the 39th U.S. president. He was the longest-lived president in history, dying December 29 at the age of 100.

The one-day extension also applies to any federal income, payroll or excise tax deposit due on Jan. 9, including those required to be made through the Treasury Department’s Electronic Federal Tax Payment System.

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Accounting

IRS Free File starts Jan. 10

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IRS Free File Guided Tax Software will be available this Friday for taxpayers ahead of the start of tax season later this month.

Starting Jan. 10, IRS Free File will begin accepting individual returns. Providers will generally allow taxpayers to prepare and file returns now and hold them for e-filing when the season starts. 

Taxpayers can access free software tools at IRS Free File page on IRS.gov.

U.S. Department of the Treasury Internal Revenue Service (IRS) 1040 Individual Income Tax forms for the 2016 tax year are arranged for a photograph in Tiskilwa, Illinois, U.S., on Monday, Dec. 18, 2017. This week marks the last leg of Republicans' push to revamp the U.S. tax code, with both the House and Senate planning to vote by Wednesday on final legislation before sending it to President Donald Trump. Photographer: Daniel Acker/Bloomberg

“Taxpayers have multiple filing choices,” said IRS Commissioner Danny Werfel, in a statement, “including trusted tax professionals, tax software, Free File, Direct File or free preparation services through IRS partners.”

IRS Free File is entering its 23rd filing season and is delivered through a partnership between the IRS and Free File Inc. (formerly the Free File Alliance). Eight private-sector partners will provide online guided tax software products for taxpayers with an adjusted gross income of $84,000 or less in 2024. Taxpayers with an AGI above $84,000 can use the Free File Fillable Forms starting Jan. 27.

For 2025, the partners participating in IRS Free File are 1040Now, Drake (1040.com), ezTaxReturn.com (also in Spanish), FileYourTaxes.com, On-Line Taxes,TaxAct, TaxHawk (FreeTaxUSA) and TaxSlayer.

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Accounting

Which states are most — and least — competitive on sales taxes

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Enjoy complimentary access to top ideas and insights — selected by our editors.

Local governments and municipalities have been raising sales tax rates or introducing new taxes throughout 2024, due to the inflationary environment in place prior to the Federal Reserve’s interest rate cuts. Amid lawsuits and proposals for regulations on voluntary sales tax disclosures, much is due to change.

In the Tax Foundation’s 2025 State Tax Competitiveness Index, the organization judged each state based on five areas: individual income taxes; sales, use, and excise taxes; corporate taxes; property and wealth taxes and unemployment insurance taxes. Sales and excise taxes was the second highest-weighted category at 22.8%.

The most competitive states are ranked from one to 10 according to their scores, one being the most competitive within the group and 10 being the least. For the states at the tail end of the spectrum, which are the least competitive in terms of sales and excise taxes, rankings are from 50 for the least competitive to 40 for the state with the highest comparative score.

Read on to see which states were the most — and least — competitive when it comes to these tax areas.

10 states with the most and least competitive sales and excise taxes in 2025 

10 most competitive

2025 Rank State 2025 Score 2024 Rank 2023 Rank 2022 Rank 2021 Rank 2020 Rank
1 (tie) New Hampshire 8.93 1 1 1 2 1
1 (tie) Delaware 8.93 2 2 2 1 2
3 Montana 8.85 3 3 3 3 3
4 Oregon 8.62 4 4 4 4 4
5 Alaska 7.86 5 5 5 5 5
6 Wisconsin 6 6 6 6 7 7
7 Wyoming 5.97 7 7 7 6 6
8 Maine 5.86 8 8 8 9 8
9 Idaho 5.46 11 12 12 12 12
10 Virginia 5.43 9 11 10 10 10

10 least competitive

2025 Rank State 2025 Score 2024 Rank 2023 Rank 2022 Rank 2021 Rank 2020 Rank
50 Washington 2.94 50 49 49 49 49
49 Alabama 3.17 49 50 50 50 50
48 Louisiana 3.23 48 48 48 48 48
47 Tennessee 3.66 47 47 47 47 47
46 California 3.81 46 46 44 43 44
45 Arizona 3.84 45 45 45 45 45
44 Arkansas 3.89 44 44 43 44 43
42 (tie) Ohio 3.97 43 43 42 41 41
42 (tie) New York 3.97 40 41 41 42 42
40 (tie) District of Columbia 4.01 43 41 41 41 41
40 (tie) New Mexico 4.01 42 42 46 46 46

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