New York, New Jersey, Connecticut and Maryland are suing the federal government over the Republican-led tax overhaul.
The lawsuit was filed Tuesday in the Southern District of New York.
The tax law passed by Congressional Republicans and signed into law last year by Republican President Donald Trump caps a deduction for state and local taxes at $10,000. The deduction was especially popular in high-tax, Democratic states, where many homeowners will see big increases in their federal tax bill.
Democratic New York Gov. Andrew Cuomo says the tax bill was crafted specifically to hurt blue states. He says it's also unconstitutional because it interferes with state taxing authority.
Supporters of the tax overhaul dismiss the lawsuit as political and say that the changes actually reduce taxes for many residents.