State lawsuits over stimulus tax rule face uphill battle
US Vice President Kamala Harris speaks about the Biden administration's decision to release $39 billion from the American Rescue Plan. Shutterstock
Friday, April 30, 2021 8:11 AM UTC
States were told by the federal government that they can’t use pandemic relief funds passed by Congress in March to lower taxes. In response, 16 states have filed lawsuits challenging the constitutionality of that restriction in the US$1.9 trillion legislation, known as the American Rescue Plan Act of 2021.
The rescue plan makes $350 billion available to state and local governments over the next four years to cover costs associated with COVID-19. It guarantees every state at least $500 million, but more can be provided based on unemployment numbers and poverty rates.