JEFFERSON CITY, Mo. (AP) — The U.S. Treasury Department says states can cut taxes without penalty from a federal pandemic relief law — so long as they use their own funds to offset those cuts.
Republican governors, lawmakers and attorneys general in numerous states have expressed concern about the relief act signed by President Joe Biden. It prohibits states from using federal aid “to either directly or indirectly” offset a reduction in tax revenue.
A treasury spokesperson tells The Associated Press the provision isn’t meant as a blanket prohibition on tax cuts; states just can’t use the relief funds to pay for them.
