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Senate Weighs $30,000 SALT Deduction Cap in Tax Bill Negotiations

As the Senate takes up President Trump’s sweeping tax bill, Accounting Today reports that Republican senators are eyeing a new compromise on one of the most contentious provisions: the cap on the state and local tax (SALT) deduction. 

According to Republican Senator Thom Tillis, GOP negotiators are considering lowering the House-passed $40,000 SALT deduction limit to $30,000 in an effort to bridge internal party divides. Tillis, a moderate Republican, said discussions are ongoing and no final decision has been made. The Senate is aiming to vote on the tax package before the end of the month, Accounting Today reported. 

SALT was a sticking point in the House, where Republicans from high-tax states such as New York, New Jersey, and California demanded an increase to the $10,000 cap established in the 2017 Tax Cuts and Jobs Act. House Speaker Mike Johnson ultimately agreed to the $40,000 cap, helping to secure passage of the bill. 

But the issue carries less weight in the Senate, where no Republicans represent states where the SALT deduction is a top political concern. That difference is complicating negotiations.

“It’s hard because we don’t have any senators from SALT states,” said Sen. Markwayne Mullin. “We are searching for a compromise.” 

Mullin said he has spoken with Rep. Mike Lawler, a New York Republican who championed the higher cap in the House. Whether the Senate will preserve the $40,000 figure—or revise it downward—remains to be seen. 

The SALT provision is just one of several elements under debate as Republican senators meet behind closed doors to discuss the details of the bill.