Clash Over Senate’s DC Tax Vote Likely to Spur Resident Lawsuits

A GOP measure President Donald Trump signed Wednesday to block a local Washington tax law is all-but-certain to prompt legal challenges—possibly even from residents of the nation’s capital.

GOP lawmakers and DC officials are at odds over whether the Senate acted in a timely fashion on voting to block the DC law. Lawsuits seem inevitable, given the potential impact of the dispute on DC’s tax filing season.

“It’s really hard to see how this doesn’t end up in litigation, because really anybody could initiate it,” said Joe Bishop‐Henchman, executive vice president at the National Taxpayers Union Foundation.

Trump signed a resolution, cleared by Senate Republicans last week, that blocks the district’s law to sever its tax code from more than one dozen provisions in the federal 2025 GOP tax-and-spending law. But a notice posted by DC Council Chair Phil Mendelson (D) said the Senate’s Feb. 12, vote was outside the 30-day window to force the pullback.

The dispute centers on timing. Though Congress is within its rights to invalidate Washington, DC, laws under the Home Rule Act, it has a finite amount of time to do it under the statute’s expedited procedures that allow the Senate to circumvent a filibuster.

The district, which still lugs paper versions of its laws to the Capitol to deliver them to lawmakers in person, believes the 30-day clock starts when bills get dropped off. Congress, meanwhile, argues that time starts after the second chamber publishes its notice of the law.

DC officials are still mulling their next steps, but taxpayers may take legal action even if the city doesn’t.

In past disputes over Home Rule Act timing, not a lot of people had standing to file a lawsuit. But if taxpayers get smaller refunds due to the congressional action, or have to wait for a long time while the city tweaks its systems, they might be impacted.

Having standing is about showing harm, not necessarily just financial harm, said Bishop-Henchman, who also serves as an Advisory Neighborhood Commissioner for Washington’s Eckington neighborhood.

And there’s reason to think that harm could include circumstances where a filer faces delays because the system needs to be overhauled, or if they get a less generous refund. The DC law Congress voted to block expanded the city’s child tax credit and earned income tax credit.

Whether the city decides to let Congress’ action stand or take the fight to court, there’s likely to be a disruption during this year’s filing season, said Lance Jacobs, managing director in the Forvis Mazars Washington National Tax Office.

“I would anticipate that DC will have to extend its deadlines,” he said. Because filing season is already ongoing, taxpayers may file original or amended returns, safeguarding their rights to get potential refunds from DC later, he added.

A Long Unanswered Question

A lawsuit could settle the long-unanswered question about what the deadline is for Congress to roll back city laws under the Home Rule Act, with implications for how the federal government oversees the city.

No court has formally adjudicated this fight, but Washington, DC, Attorney General Brian L. Schwalb wrote a 2023 letter to Mendelson giving his opinion on an earlier instance where the review period question came up. In that letter, Schwalb took the same position on timing that Mendelson is taking on the tax law vote.

Some city officials have not yet announced their next steps, but have criticized lawmakers in Congress for throwing the filing season into chaos.

Paul Strauss (D), one of the district’s shadow senators, said there’s a solid legal argument to be made around when the 30-day review period starts.

But how long any filing season delay might be, and how the federal government might react if the city were to ignore Congress’ actions, remains uncertain.

“We’re not really sure how aggressive they are going to be,” said Strauss, an elected representative that advocates for District statehood. “We’re in a little bit of uncharted territory.”