Political fight over DC tax law underway just as filing season starts
Political fight over DC tax law underway just as filing season starts
Republicans in Congress are pushing to overturn another local D.C. law. This time, it’s the tax code – a move local leaders say could cause chaos with filing season already underway. FOX 5's Tom Fitzgerald reports.
WASHINGTON - Republicans in Congress are pushing to overturn another local D.C. law.
This time, it’s the tax code – a move local leaders say could cause chaos with filing season already underway.
What we know:
In November, the D.C. Council removed the local tax code from President Donald Trump’s "One Big Beautiful Bill," which had tax cuts for D.C. filers.
The council decided it would use the $600 million in revenue for other projects like a local D.C. child tax credit.
But if Congress cancels D.C.’s law, it cancels the local child care credit and rewrites D.C. tax law with the filing season already underway.
What they're saying:
Republicans in the House and Senate on Wednesday moved forward with a "disapproval resolution." This forces D.C. to conform its local tax laws to the federal code, wiping out that $600 million in revenue and the funding for D.C.’s child tax credit.
Republicans say D.C. must conform to federal tax law.
"My joint resolution of disapproval would give the same local tax relief to D.C. residents that is provided to all Americans under President Trump's working families tax cuts," Florida Republican Sen. Rick Scott said.
Democrats say Congress is meddling in the District’s local government.
"We’re here today to mark up a bill that claims the federal government knows better than a local government when it comes to the local government’s own finances," said Democratic Sen. Maggie Hassan of New Hampshire.
Dig deeper:
Local leaders say this is the latest in a string of local D.C. laws that the GOP has moved to strike down.
The concern is that D.C.’s tax code would be rewritten, pushing filing deadlines in the year with the filing season already underway.
D.C. taxpayers are filing returns now under one set of rules, but if Congress strikes down the current code, it would force people to re-file following the federal law.
"Causing an administrative nightmare for D.C. and the tax software companies," D.C. Delegate Eleanor Holmes Norton said.
"This would not only hurt us with regard to Wall Street because it’s further evidence of congressional interference in legislating where there are fiscal implications," D.C. Council Chair Phil Mendelson said. "I mean, this is totally about the city’s tax code."
What's next:
Republicans in Congress are pushing this forward, though.
The House passed the dissaproval resolution by voice vote on Wednesday, but a final vote has been postponed.
A Senate committee also supported the measure, which would then send it to the full Senate for final approval.