- Ohio AG Dave Yost filed a motion for preliminary injunction challenging as unconstitutional a provision of the $1.9 trillion American Rescue Plan that prevents states and local governments from using COVID-19 relief funds to offset tax cuts.
- In its motion, the AG’s office alleges the tax provision exceeds Congress’s Spending Power and, if enforced, would cause irreparable harm to Ohio by forcing it to choose between maintaining its sovereign tax power or accepting the $5.5 billion funding to help Ohio recover from its $1.1 billion revenue loss caused by the pandemic.
- The AG filed its motion one day after a group of 21 Republican AGs, led by Arizona AG Mark Brnovich, Georgia AG Chris Carr, and West Virginia AG Patrick Morrisey, sent a letter to Treasury Secretary Janet Yellen requesting clarification of whether the tax provision would be narrowly interpreted to prohibit states from expressly using the funds to provide direct tax cuts or whether it would be broadly interpreted to apply to tax relief of any kind, even if it is independent and unrelated to the COVID-19 relief funds. Like the AG’s motion, the letter argues that the broader interpretation would unconstitutionally intrude upon state sovereignty.