If the tax plan passes, state taxes will not be deductible. What happens to state refunds, do they stay taxable to the extent that you deducted or not taxable at all?

 

Retirement tax questions

"Taxable recoveries" will always be a thing -- if you get a tax benefit in one year that is repaid in a future year, that creates a taxable recovery.  State refunds are the most common kind of recovery but there are others (such as, if you deduct medical expenses and then get a refund from the doctor because they overcharged you, or you claim the energy credit on the full price of a new furnace but then get a rebate from your utility -- you have to refigure the credit and pay the rest back.

So at least for the 2018 tax return (that you will file in the Spring of 2019) you should expect that if you deducted your state and local tax on your 2017 return and got a refund in calendar year 2018, that refund will be a taxable recovery on your 2018 taxes if you got a benefit from the deduction.