Congress today gave final approval to the largest tax law re-write in 30 years, cutting taxes for corporations, small businesses, and many individuals, but also eliminating some tax deductions important to New Jersey.
The Senate passed the bill after midnight following House passage yesterday afternoon. The House of Representatives needed to vote again today to clean up some budget-rule technicalities before sending the bill to the White House.
According to NJBIA President & CEO Michele Siekerka, the cap on deducting state and local taxes and a lower cap for mortgages eligible for the mortgage interest tax deduction will keep it from providing a net benefit for New Jersey businesses and residents.
“The limiting of the property tax deduction and mortgage interested deductions will negatively impact property values in New Jersey,” she said in a statement after the Senate vote. “We are already one of the highest-taxed states in the nation, sending a disproportionate number of tax dollars to Washington, D.C. every year for what we receive in federal aid or spending.”
According to Bloomberg.com, the bill would:
- cap the deduction for state and local taxes at $10,000;
- limit deductible mortgage interest to loans of $750,000 or less;
- allow pass-through entities to deduct 20 percent from their business income, subject to limits;
- allow companies to fully and immediately deduct the cost of certain equipment;
- double the standard deduction to $24,000 for joint filers;
- cut the corporate tax rate to 21 percent; and
- eliminate the corporate alternative minimum tax.