H.R. 7561

[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 7561 Introduced in House (IH)]

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119th CONGRESS
2d Session
H. R. 7561

To amend the Internal Revenue Code of 1986 to modify the limitation on 
individual deductions for certain state and local taxes and to allow a 
deduction for qualified special assessment taxes, and for other 
purposes.

_______________________________________________________________________

IN THE HOUSE OF REPRESENTATIVES

February 12, 2026

Ms. Stevens (for herself, Mrs. Dingell, Ms. Scholten, and Ms. McDonald 
Rivet) introduced the following bill; which was referred to the 
Committee on Ways and Means

_______________________________________________________________________

A BILL

To amend the Internal Revenue Code of 1986 to modify the limitation on 
individual deductions for certain state and local taxes and to allow a 
deduction for qualified special assessment taxes, and for other 
purposes.

Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the ``Local Infrastructure Tax Cuts Act''.

SEC. 2. MODIFICATION OF LIMITATION ON INDIVIDUAL DEDUCTIONS FOR CERTAIN 
STATE AND LOCAL TAXES.

(a) In General.--Section 164(b)(7) of the Internal Revenue Code of 
1986 is amended to read as follows:
``(7) Applicable limitation amount.--
``(A) In general.--For purposes of this subsection, 
the term `applicable limitation amount' means--
``(i) $0 in the case of any taxpayer whose 
modified adjusted gross income exceeds the 
threshold amount,
``(ii) $5,000 in the case of a married 
individual filing a separate return, and
``(iii) $10,000 in the case of any taxpayer 
not described in clause (i) or (ii).
``(B) Threshold amount.--For purposes of this 
paragraph, the threshold amount shall be--
``(i) in the case of a joint return, 
$215,000,
``(ii) in the case of a head of household 
(as defined in section 2(b)), $161,250, and
``(iii) in the case of any taxpayer not 
described in clause (i) or (ii), $107,500.
``(C) Modified adjusted gross income.--For purposes 
of this paragraph, the term `modified adjusted gross 
income' means the adjusted gross income of the taxpayer 
for the taxable year increased by any amount excluded 
from gross income under section 911, 931, or 933.
``(D) Inflation adjustment.--In the case of any 
taxable year beginning after 2027, each of the dollar 
amounts in subparagraphs (A) and (B) shall be increased 
by an amount equal to--
``(i) such dollar amount, multiplied by
``(ii) the cost-of-living adjustment 
determined under section 1(f)(3) for the 
calendar year in which the taxable year begins, 
determined by substituting `calendar year 2026' 
for `calendar year 2016' in subparagraph 
(A)(ii) thereof.
If any amount as increased under the preceding sentence 
is not a multiple of $50, such amount shall be rounded 
to the nearest multiple of $50.''.
(b) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning after December 31, 2026.

SEC. 3. DEDUCTION ALLOWED FOR QUALIFIED SPECIAL ASSESSMENT TAXES.

(a) In General.--Section 164(a) of the Internal Revenue Code of 
1986 is amended by inserting after paragraph (4) the following new 
paragraph:
``(5) Qualified special assessment taxes.''.
(b) Qualified Special Assessment Taxes.--Section 164(b) of such 
Code is amended--
(1) by redesignating paragraphs (6) and (7) as paragraphs 
(7) and (8), respectively, and
(2) by inserting after paragraph (5) the following new 
paragraph:
``(6) Qualified special assessment taxes.--
``(A) In general.--The term `qualified special 
assessment tax' means a tax which is imposed--
``(i) by a State, a possession of the 
United States, or a political subdivision of 
any of the foregoing, or by the District of 
Columbia,
``(ii) on real property located within a 
geographic area designated as a special 
assessment district by such State, possession, 
or political subdivision, or by the District of 
Columbia, and
``(iii) for the purpose of funding a 
community infrastructure project that would 
directly benefit such real property.
``(B) Community infrastructure.--
``(i) In general.--For purposes of 
subparagraph (A), the term `community 
infrastructure' means a project or facility 
described in clause (ii) that is owned by--
``(I) a State, a possession of the 
United States, or a political 
subdivision of any of the foregoing,
``(II) the District of Columbia, or
``(III) a not-for-profit, member-
owned utility service.
``(ii) Project described.--A project or 
facility described in this clause is any of the 
following:
``(I) Any transportation project.
``(II) A school, hospital, police, 
fire, emergency response, or other 
community support facility.
``(III) A water, waste-water, 
stormwater, telecommunications, 
electric, gas, or other utility 
infrastructure project.
``(IV) A dam restoration project.
``(C) Deduction limited to taxes paid or accrued 
with respect to principal residences.--The deduction 
under subsection (a) for qualified special assessment 
taxes may only be allowed if such taxes are paid or 
accrued with respect to the taxpayer's principal 
residence (within the meaning of section 121).''.
(c) Application of Limitation on Amount of Deduction.--Section 
164(b)(7)(B) of such Code, as redesignated by subsection (b), is 
amended by striking ``and (3)'' and inserting ``(3), and (5)''.
(d) Conforming Amendment.--Section 164(c)(1) of such Code is 
amended by striking ``Taxes'' and inserting ``Except as provided in 
subsection (a)(5), taxes''.
(e) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2026.
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