We told you how the tax mandate in the American Rescue Plan Act of 2021 prevented states which utilized COVID-19 relief funding from lowering taxes between now and 2024. Today we’re happy to report a major victory in the lawsuit that was brought by 13 states in federal district court in Alabama. We filed a critical amicus brief with the court in that case on behalf of 78 Members of Congress who were pushing back on this tax cut ban.
Last night the federal district court in Alabama ruled that the federal government cannot do that and permanently enjoined this provision from going into effect. In this case, the Constitution and federalism has prevailed.
ACLJ Director of Government Affairs Thann Bennett explained the significance of this win:
“It’s a very significant win on a number of levels. First of all, for federalism, on state authority to set its own taxation policy on the limits of the federal government not being able to intrude into states to set policy that is reserved for the states. . . . With this great win out of the Alabama court, that joins the other case that we had filed on behalf of the Members in Ohio. So now, two states . . . two main challenges to this provision have gone our way as we have represented Members of Congress [in both].”
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