Tax experts have identified a potential workaround to the new limitation Republicans are placing on the state and local tax deduction, and say states could set up charities to fund state services that could receive federally deductible gifts.

The GOP tax overhaul passed by Congress this week sets a limit on the federal deduction for state and local taxes, or SALT. Under the bill, taxpayers can only deduct up to $10,000 in state income and property taxes from their federal taxable income.