"Make no mistake: We have been and will continue to fight against this economic missile with every fiber of our being. The IRS should not be used as a political weapon, and I urge this administration to stop its partisan assault on New Yorkers and instead work with us to deliver real, lasting relief for hardworking families," said Cuomo. 

New Jersey Attorney General Gurbir S. Grewal also released a statement, saying that his state would fight any attempts to shut down tax deductions from state-run nonprofits. He said that both policy and precedent supports what he and other states are doing. 

“The statute is explicit that such contributions include gifts given to state governments and their political subdivisions,” Grewal notes. “The only remaining issue is whether such gifts are deductible if the contributor gets a tax credit in return.” While the IRS has previously “answered that question resoundingly in favor of laws” like New Jersey’s, the latest guidance “suggests that the IRS plans to tell states and taxpayers alike the answer is no.”