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Let States Cut Taxes Act: Removing Restrictions on State Tax Reductions

This act removes previous restrictions that prevented states and territories from lowering their taxes while receiving federal Coronavirus State Fiscal Recovery funds. This change gives local governments more flexibility in their tax policies, potentially impacting the taxes citizens pay. However, these funds still cannot be used to deposit into pension funds.
Key points
States and territories can now lower taxes without penalty related to federal aid.
Federal COVID-19 recovery funds cannot be used for pension fund deposits.
The changes are effective retroactively from March 12, 2021.
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Additional Information
Print number: 117_S_3009
Sponsor: Sen. Braun, Mike [R-IN]
Process start date: 2021-10-20