Senate Republicans are weighing a new $30,000 cap on the state and local tax (SALT) deduction, a potential compromise between the $10,000 cap and the $40,000 threshold included in the House-passed version of the bill, now under Senate review.

Bloomberg reports that Senator Thom Tillis, a key Republican involved in negotiations, confirmed the proposal as talks intensify ahead of a planned Senate vote before July 4. "We understand that it's a negotiation," Senator Majority Leader John Thune told reporters on June 16. "Obviously there had to be some marker. We are prepared to have discussions with our colleagues here in the Senate and figure out a landing spot."

The House’s $40,000 cap emerged after pressure from Republicans in high-tax states like New York, New Jersey, and California, who threatened to withhold support without without meaningful changes to the deduction limit. House Speaker Mike Johnson eventually backed  the deal, but has since urged the Senate to limit changes to the SALT provision to preserve a delicate balance. 

At the moment, the Senate draft keeps the existing $10,000 cap as a placeholder, signaling that negotiations are ongoing. The broader package aims to extend many of the 2017 tax cuts, raise the debt ceiling, and implement several new provisions, including exemptions for tips and overtime pay and a revised child tax credit. 

While SALT negotiations remain unresolved, Senate Republicans appear intent on delivering the legislation to the president’s desk ahead of the August recess.