Georgia Attorney General Chris Carr has joined the attorneys general of 20 other states in a letter to Treasury Secretary Janet Yellen over the provision of the recent stimulus bill that prohibits states from using the funds provided to states to cut taxes.
Section 9901 of American Rescue Plan Act states: “A State or territory shall not use the funds provided under this section or transferred pursuant to section 603(c)(4) to either directly or indirectly offset a reduction in the net tax revenue of such State or territory resulting from a change in law, regulation, or administrative interpretation…that reduce any tax (by providing for a reduction in a rate, a rebate, a deduction, a credit, or otherwise) or delays the imposition of any tax or tax increase.”
In the letter, the attorneys general blast the provision and offer what a lawsuit could look like when the provision is inevitably enforced. “Put aside the gross federal overreach inherent in trying to take state tax policy hostage in this way,” the letter states. “If this expansive view of this provision were adopted, it would represent an unprecedented and unconstitutional infringement on the separate sovereignty of the States.”