The House Ways & Means Committee released the amendment text of “The One, Big, Beautiful Bill” and held a markup on Tuesday to consider issues under their jurisdiction and passed on a party line vote early on Wednesday morning. 

This legislation includes an increase in the State and Local Taxes (SALT) cap deduction from $10,000 to $30,000 with an income cap of $400,000. However, published reports indicate that SALT Caucus members, including members from New Jersey, are advocating for a higher cap of $62,000 for single filers, $124,000 cap for joint filers and have those limits indexed for inflation. This is a fluid situation, and despite the committee passage, the final result will likely be different from the initial proposal.  

There is no proposed change to the tax-exempt status of municipal bonds. We would like to thank the municipal officials who reached out to their Members of Congress and passed the League’s Sample Resolution on this issue.  

The key highlights of the bill that affect municipal governments include: 

• Phases out direct pay tax credits and eliminates tax credits for electric vehilces (EV's).
• Makes changes to Low-Income Housing Tax Credit. 

The One, Big, Beautiful Bill summary broken down by section includes:  

Subtitle A: Make American Families and Workers Thrive Again 

• Makes permanent the 2017 Tax Cuts and Jobs Act (TCJA) individual tax cuts and standard deduction increases.
• Enhances the Child Tax Credit and Qualified Business Income Deduction.
• Introduces new deductions for tips, overtime, car loan interest, and seniors.
• Expands education and family tax benefits, including MAGA savings accounts.
• Reforms Health Savings Accounts (HSAs), Flexible Savings Accounts (FSAs), and Health Reimbursement Accounts (HRAs) to increase flexibility and access.

Subtitle B: Make Rural America and Main Street Grow Again 

• Restores 100% bonus depreciation and immediate expensing for Research & Development.
• Launches a new round of Opportunity Zones with a rural focus.
• Increases Section 179 expensing limits, which a business asset can write off immediately from their taxes and expands small manufacturer eligibility.
• Provides tax relief for rural lending, housing, and sound recording production.
• Extends and modifies the clean fuel production credit.

 Subtitle C: Make America Win Again 

• Phases out or terminates numerous clean energy tax credits.
• Restricts access to credits for foreign-influenced entities.
• Enhances enforcement against unfair foreign taxes and abusive tax shelters.
• Reforms tax treatment of elite universities, private foundations, and high earners.
• Permanently raises the SALT deduction cap to $30,000 with income-based phase-outs.

 Subtitle D: Increase in Debt Limit 

• Raises the statutory debt ceiling by $4 trillion to accommodate fiscal changes.

Congress is utilizing the Reconciliation process to pass this legislation, which only requires a simple majority in the House and Senate for passage. Senate legislation generally requires 60 votes to proceed. However, only policies that change spending or revenue can be included in this process.  

This bill will change throughout the legislative process. We will share the changes as developments occur.  

Contact: Paul Penna, Director of Government Affairs, ppenna@njlm.org, 609-695-3481, x110.