Kentucky and Tennessee AGs file lawsuit challenging American Rescue Plan Act

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FRANKFORT, Ky. (WTVQ) – A lawsuit filed by Attorney General Daniel Cameron and Tennessee Attorney General Herbert Slatery III challenges the American Rescue Plan Act.

According to the attorney generals, the act contains a tax mandate that keeps states from enacting tax cuts for their citizens. If a state received COVID relief funds, this limits the tax policies the states can establish.

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Cameron and Slatery argue that using the pandemic as a reason to control state tax policies violates state sovereignty and puts states in a hard decision between accepting relief funds or enacting tax cuts. They filed a Motion for Summary Judgment in the United States District Court for the Eastern District of Kentucky asking the court to declare the tax mandate unconstitutional.

“The Biden Administration’s enforcement of a single provision of the American Rescue Plan Act threatens to undermine the ability of our legislators to set beneficial tax policies for Kentuckians for the next four years,” said Attorney General Cameron.  “The federal government’s actions are a gross intrusion on the General Assembly’s law-making authority, and could threaten not only COVID relief funding but future economic growth in the Commonwealth resulting from favorable tax policies.”

A copy of the motion is available to view online.