An unexpectedly high number of employers have opted into New York’s voluntary payroll tax, one of two workarounds enacted by the state in response to the 2017 federal tax law’s state and local deduction cap.

According to the Division of the Budget, 262 businesses registered for the program by the Dec. 1 deadline. The state isn’t able to disclose details about the companies because of tax privacy laws, Morris Peters, a spokesman for DOB told Bloomberg Tax.

“The fact that hundreds of employers have registered for the alternative Employer Compensation Expense Program shows that the business community is taking this federal tax threat seriously,” he said in an email.

New York enacted the voluntary payroll tax—and a new charitable contribution credit—to protect its taxpayers from the 2017 federal tax law’s (Pub. L. No. 115-97) $10,000 cap on the deduction for state and local taxes paid.

Employers who registered for the program will pay a 1.5 percent payroll tax in 2019 on payroll expenses that exceed $40,000 per year for employees in New York state. Their employees will receive a tax credit for the amount paid, giving them a way to mitigate the impact of the SALT deduction because their personal income tax liability will be lower.

Jennifer S. White, a tax attorney in the New York City office of Reed Smith LLP, told Bloomberg Tax that she was surprised that as many as 262 companies signed up. “That’s about 262 more than I thought there’d be,” she said.

White said the program could be appealing to small employers but large employers find it too complex, particularly those with employees in different states.

Kenneth Pokalsky, vice president of the Business Council of New York State, said he was unaware of any Business Council members that opted into the program. He said the program was particularly complex for multistate employers and those with unionized workers.