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State Fiscal Flexibility: End of Tax Cut Prohibition

This act removes the prohibition on states and territories from lowering their taxes, even if they received coronavirus relief funds. This means local governments have more freedom in tax policy, potentially affecting the taxes citizens pay. However, these funds still cannot be used for pension funds.
Key points
States and territories can now lower taxes, even if they received federal aid funds.
Federal funds still cannot be used to deposit into pension funds.
The changes are effective retroactively, as if included in the American Rescue Plan Act of 2021.
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Expired
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Additional Information
State Fiscal Flexibility Act of 2021
Print number: S 743
Sponsor: Sen. Crapo, Mike [R-ID]
Process start date: 2021-03-15