Pennachio slams Murphy over IRS suit

State Sen. Joe Pennacchio slammed Gov. Phil Murphy over a lawsuit his administration filed Wednesday seeking to overturn an Internal Revenue Service rule that blocked the state’s attempt to work around the cap on state and local tax deductions.

“The Murphy Administration is lawsuit happy,” Pennacchio said. “The Governor should not be using New Jersey taxpayer dollars to play politics. Rather than fighting with the federal government, I urge Governor Murphy to focus on genuine and immediate tax solutions that we have the power as state lawmakers to advance.”

As part of their 2017 tax plan, congressional Republicans capped SALT deductions at $10,000.

In an attempt to ease strain caused by the cap in a high-tax state like New Jersey, state lawmakers passed and Murphy signed into law in may a measure that would allow municipalities to classify most property tax payments as charitable contributions.

The IRS blocked that workaround, as well as others by New York and Connecticut.

In its suit, Murphy’s administration claims the IRS is unfairly targeting blue states because it did not take action on similar workarounds in other, primarily red states.

“This lawsuit is a distraction from the issue at hand – New Jersey taxes are through the roof,” Pennacchio said. “The IRS made it clear that they will not allow this concerted effort to evade federal taxes to continue. Rather than waste taxpayer time and money to grab headlines, the Governor should work with the state legislature to focus on alleviating New Jersey’s unreasonably high tax burden.”