Amicus brief challenges American Rescue Plan provision preventing states from lowering taxes
PHOENIX, April 26, 2021—The Small Business Legal Center for the nation’s largest and leading small business association filed an amicus brief late Friday afternoon supporting Arizona Attorney General Mark Brnovich’s lawsuit against the federal government over a provision in the American Rescue Plan Act of 2021 that would prevent states from lowering their own taxes.
“Congress passed the American Rescue Plan to relieve some of the financial pressure caused by the pandemic, but a provision that blocks Arizona and other states from cutting taxes is eroding state sovereignty and hurts local businesses,” said Karen Harned, executive director of the NFIB Small Business Legal Center, which filed the brief today in the U.S. District Court of Arizona.
In a March 25 news release announcing the filing of his lawsuit, Attorney General Brnovich said, “It’s unacceptable for the federal government to commandeer states’ tax policies and micromanage their budgets. We will always fight on behalf of hardworking taxpayers and push back against federal overreach.”
Chad Heinrich, Arizona state director for NFIB, also commented: “Every state should be insulted by the last-minute amendment the US Senate adopted into the American Rescue Plan. If a state can no longer be a master of its own destiny on tax and spending matters, then we may as well resort to a central planning model run out of DC. What needs to be made clear and repeated often is that the State of Arizona’s financial health is a product of prudent fiscal management with sound policies that attract businesses and residents to live, work and enjoy life in Arizona.”
The American Rescue Plan Act of 2021 made funds available to states if and only if states agree to not pass any laws or take any administrative actions that decrease their net revenue, whether that decrease comes through tax credits, rebates, reductions in tax credits, or new or expanded deductions. NFIB believes the court should block this unprecedented tax mandate and grant the states’ motion for a preliminary injunction.
The NFIB Small Business Legal Center protects the rights of small business owners in the nation’s courts. NFIB is currently active in more than 40 cases in federal and state courts across the country and in the U.S. Supreme Court.
Keep up with the latest on Arizona small business news at www.nfib.com/arizona or by following NFIB on Twitter @NFIB_AZ
For 78 years, NFIB has been advocating on behalf of America’s small and independent business owners, both in Washington, D.C., and in all 50 state capitals. NFIB is a nonprofit, nonpartisan, and member-driven association. Since its founding in 1943, NFIB has been exclusively dedicated to small and independent businesses and remains so today. For more information, please visit nfib.com.
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