* Maryland…

Democrats in Maryland’s state legislature on Tuesday rolled out three bills in response to the new tax overhaul that President Trump signed last month, including trying to protect state and local tax (SALT) deductions. […]

One of the bills is designed to mitigate the fact that the new tax law caps the SALT deduction at $10,000. Under the measure, Maryland residents would be able to make charitable contributions to a state fund and receive a credit against their state taxes. The donations could still be deductible from federal taxes.

The other two bills would decouple Maryland’s tax code from the federal tax code.

One would allow Maryland residents to still claim personal exemptions on their state taxes, even though personal exemptions are eliminated from the federal tax code. Lawmakers said that residents would see state tax increases absent this change.

The other would separate the Maryland and federal estate taxes. The new federal tax law increases the amount that’s exempt from the estate tax to about $11 million for an individual, and Maryland Democrats want to limit the state’s exemption about to about $5 million.

* More…

The federal tax bill would ultimately cost Marylanders about $1 billion, Busch and Senate President Thomas V. Mike Miller Jr. estimated, with “$680 million in exemptions taken away.”

The bills would lower state taxes for about 92 percent of Marylanders, they said.

* Meanwhile, in New York…

Gov. Andrew Cuomo’s proposed conversion from an income tax to a payroll tax would be voluntary for some businesses, officials said Tuesday.

Cuomo, a Democrat, broke with expectation and did not include details of his planned changes to the state tax code when he unveiled a $168.2 billion spending plan. Instead, the governor said his tax commissioner will release a preliminary report on the potential change on Wednesday, as well as other proposals to help high-tax New York avoid the pinch of federal limits on the deductibility of state and local taxes.

That includes, as other states have proposed, setting up dedicated funds through which New Yorkers could donate to local governments and allowing businesses to substitute payroll taxes — which are fully deductible under the federal tax bill, H.R. 1 (115) — for income taxes, whose combined deductibility with property taxes is capped at $10,000. […]

The payroll tax switch has been described by business leaders as more complicated than the donation-credit ideas advancing in New Jersey and California, but its principal benefit is its application to a wider range of people — not simply those who elect to use it, as a donation would be.

* California…

The proposed California workaround, by Senate leader Kevin de Leon, is the first of what are expected to be several legislative efforts in high-tax states to mitigate the impact of the SALT deduction cap on their residents.

The average state and local tax deduction claimed by Californians is well above the cap, at $18,438, according to de Leon’s office.

To help ensure they can still deduct much or all of the state and local taxes they pay, de Leon has proposed letting residents make a charitable contribution to the state in exchange for a tax credit.

That way, the charitable contribution would be deductible on their federal return, since the new federal tax law doesn’t limit deductions for charitable gifts except in certain instances.

…Adding… HB4237…

Amends the Illinois Income Tax Act. Creates an income tax credit in an amount equal to the contributions made by the taxpayer to the Illinois Excellence Fund during the taxable year. Amends the State Finance Act. Creates the Illinois Excellence Fund. Provides that moneys in the Fund shall be used for exclusively public purposes, as specified under Section 170 of the Internal Revenue Code relating to charitable contributions and gifts. Amends the Counties Code. Provides that the county board may establish a fund in the county treasury for the purpose of accepting contributions for exclusively public purposes, as specified under Section 170 of the Internal Revenue Code relating to charitable contributions and gifts and may provide for a credit against the taxpayer’s property tax liability in an amount equal to the amount of the contribution. Effective immediately.