Treasury Asks Court To Toss Ky., Tenn.'s Virus Relief Tax Suit

Law360 (July 22, 2021, 4:10 PM EDT) -- Kentucky and Tennessee lack standing to challenge a coronavirus relief law's provision that would allow the federal government to withhold funds from states that lower their taxes, the U.S. Department of the Treasury told a federal court.

Treasury asked the court Wednesday to dismiss the states' suit seeking to block the department and its secretary, Janet Yellen, from enforcing a clawback provision in the American Rescue Plan Act. Treasury said the challenge to the act isn't ripe because the states haven't passed any tax cuts that may be offset by federal aid.

"The offset provision restricts a state only from using...

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