FOR IMMEDIATE RELEASE
October 4, 2004
CONTACT: Kevin Schweers
JOBS ACT INCLUDES STATE SALES TAX DEDUCTION
Senator Hutchison Urges Conferees to Keep Provision in Final Bill
WASHINGTON, DC -- Calling it an important step toward tax equity, Sen. Hutchison today welcomed the release of a preliminary draft of the conference report to the American Jobs Creation Act of 2004 (H.R. 4520/S. 1637) that included state sales tax deduction language, enhancing fairness for Texans in the tax code. The provision would provide taxpayers living in states without a state income tax the option of deducting state and local sales taxes on their federal income tax returns. The draft legislation, or Chairman's mark, refers to the base language used during the House-Senate Conference negotiations. The Conference, led by House Ways and Means Chairman Bill Thomas (R-CA), is working to conclude deliberations on the bill this week.
Sen. Hutchison continues to urge her Senate colleagues working to resolve the differences in the House and Senate versions of the JOBS Act to include the proposal in the final bill. Recently, Sen. Hutchison contacted Senate conferees, held a bipartisan rally with fellow members of Congress and sent a letter to Senate Finance Committee Chairman Chuck Grassley (R-IA) and Ranking Member Max Baucus (D-MT) asking for their support.
"I am committed to correcting this inequity," Sen. Hutchison said. "Texans shouldn't be taxed on our taxes. After years of work, we finally have the opportunity to right this wrong. I commend Chairman Thomas and the conferees for including this important provision and I am hopeful it will be in the final conference report. I want to thank Congressman Kevin Brady and House Majority Leader Tom DeLay for their hard work on this issue as well."
Currently, residents of 41 states can deduct state income tax payments, but Texas is among seven states with a sales tax but no personal income tax. Sen. Hutchison and Rep. Brady led the Texas delegation this summer in a letter strongly urging the conferees to incorporate the full state sales tax deductibility language in any final conference report to the American Jobs Creation Act.
The deduction was eliminated in 1986, and now affects 55 million taxpayers living in the seven states with sales taxes but no income taxes. According to the State Comptroller's office, in 2004 the deduction could save the average Texas family that itemizes $310. "This is a matter of simple fairness and would provide a direct economic boost to consumers, especially middle income families," Sen. Hutchison added.
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