The credit rating agency Moody’s on Tuesday found in analysis that the Internal Revenue Service’s proposal to block states from creating workarounds for a $10,000 cap on state and local tax deductions is a credit negative for high-tax states like New York.

New York, along with California, Connecticut and New Jersey created workaround provisions for the cap on the deductions, essentially creating charitable vehicles to which taxpayers can donate instead of paying local taxes. The move would allow taxpayers to still deduct that amount from their federal taxes.

But the IRS last month signaled this won’t fly with its interpretation of the federal tax law, though a formal guidance is yet to be released by the agency.

The SALT cap has been a major issue for Gov. Andrew Cuomo, who has railed against the provision contained in the tax law as unfairly impacting New York and its tax picture.

Meanwhile, the tax law’s impact could have far wide-ranging impacts. States will likely see increased tax revenue as a result as the broader federal tax base. But home values could still be impacted.

“The SALT cap will likely dampen housing price growth in high-tax states and states with a high percentage of SALT filers by removing an incentive for homeownership,” the report found. “Slower price appreciation will curb growth in assessed values. Depending on how taxes are structured and local governments’ capacity to raise them, reduced assessed value growth will also reduce growth in property taxes. With a cap on SALT deductions, voters in some municipalities will be more likely to reject tax increases because they will not be partially offset by a federal tax benefit.”