By Associated Press - Friday, August 24, 2018

TRENTON, N.J. (AP) - Gov. Phil Murphy says the Trump administration is punishing New Jersey for enacting a law to avoid a new cap on widely popular state and local tax deductions.

Murphy spokes Friday alongside Assembly Speaker Craig Coughlin and Senate President Steve Sweeney.

Murphy was reacting to new Treasury Department guidelines released Thursday aimed at challenging high-tax states’ moves to skirt a $10,000 limit on state and local tax deductions.

The Democratic governor and Democrat-led Legislature earlier this year enacted legislation to permit residents to use charitable funds to pay property taxes. Charitable contributions are uncapped under new federal law.

Murphy says the administration’s new rules “effectively invalidate our law.” He pledged to push back but stopped short of introducing legislation or lawsuits.

A message left for the IRS wasn’t immediately returned.

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