The language may be dense and legalistic, but the message is clear enough: Oh no you didn’t.
On Tuesday, D.C. Attorney General Brian Schwalb said that Congress had failed in its attempt this month to repeal a tax bill passed by the D.C. Council, raising the stakes in a fight between local and federal lawmakers over both tax policy and the technicalities of Congressional oversight of the city.
Schwalb’s legal opinion had been requested by D.C. Chief Financial Officer Glen Lee in the wake of House and Senate votes this month to disapprove of a bill that decoupled the city’s tax code from certain provisions of the federal tax code (and thus parts of the president’s signature tax cuts). The disapproval resolution – which was signed into law by President Trump last week – threatens to throw the current tax-filing season into chaos and would cost D.C. more than $650 million in lost revenue over the next four years.
But in a 12-page legal opinion, Schwalb said that Congress didn’t actually succeed in repealing the bill, both because of how Republicans wrote their disapproval resolution and how long it took them to get it through both the House and the Senate.
“Congress could still repeal [the bill],” he warned. “But, in our view, Congress did not do so here.”
The principal reason, said Schwalb, is that the council’s tax bill retroactively changed D.C.’s laws so they would apply for the 2025 tax year. The Republican disapproval resolution, though, does not apply retroactively.
“An individual who committed a crime while a temporary statute was in effect, for instance, can still be punished for that crime after the statute expires, and an individual who accrues civil liability under a subsequently repealed statute can still be subject to an enforcement action for violating that statute after the law is repealed,” explained Schwalb.
He also addressed what had become a more public point of contention: whether Congress acted within the 30 days that it has to repeal bills passed by the council. Schwalb agreed with some local lawmakers and activists who have argued that the Senate waited a day too long to act. As such, he wrote, the vote “must be interpreted as an expression of Congress’s unfavorable view of the [bill], but not as a repeal.”
Schwalb’s opinion pushes D.C. into rare territory: Seemingly defying Congress and challenging the technicalities of how it can control the city’s local affairs, a move that could spark legal and political retaliation from Republicans who have already aggressively interfered in the city’s business. (Schwalb has challenged the Trump administration before, suing over the deployment of the National Guard and the push to take control of the Metropolitan Police Department.)
While D.C.’s elected officials are often quick to decry congressional interference, in this case, they have mostly remained publicly quiet and privately divided over how to proceed. That’s been especially evident within the council itself, where lawmakers have debated behind closed doors whether or not to challenge the Republicans’ disapproval resolution. There have even been discussions about defusing the conflict altogether by passing a bill to recouple the city’s tax code with Trump’s tax cuts, according to Council Chairman Phil Mendelson.
“What we're working through is the political aspects, and the political aspects are that the Republicans have shown themselves to be very vindictive. And the District, unfortunately, is in a vulnerable position,” Mendelson told The 51st on Tuesday afternoon. “And at the same time, I think it's safe to say that virtually every member of the council does not want appeasement and wants to stand up for our rights.”
When asked for a response to Schwalb’s opinion, a spokesperson for Mayor Muriel Bowser punted to the CFO’s office. A spokesman says the office is now reviewing it, and in the meantime, tax season continues as usual under the provisions the council approved in its decoupling bill; residents and businesses can continue to file their returns.
If Congress has its way, Lee says tax-filing season would have to be delayed and deadlines could extend into the late summer months and beyond. It could also cost D.C. $5-10 million to redo tax forms, systems, and guidance to preparers and lead to a possible cash flow shortage for the city.
“Typically during the April filing season we receive roughly $400-450 million in final tax payments. If we need to suspend the current process… we would not receive that $450 million until September,” he told lawmakers.
As of this week, Lee said 75,000 D.C. residents had filed their tax returns, roughly 20% of the total.
During a council hearing on Tuesday afternoon, activists pushed for Lee to stay the course, no matter what Republicans on Capitol Hill might threaten.
“To do otherwise would put the District into unnecessary financial peril, and threaten further loss of our limited autonomy,” said Michelle Chappell, co-chair of the Congress Working Group for Free D.C. “If we capitulate to an invalid disapproval resolution, we stand to lose much more than one orderly tax season. We would effectively be ceding control of our local tax system to an incompetent federal government.”
Martin is a longtime reporter and editor in D.C. He formerly worked for WAMU 88.5 and DCist.com, and has contributed to the Washington City Paper and other publications. He's been in D.C. for 25 years, and tries to ride his bike everywhere he can.
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