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FOR IMMEDIATE RELEASE
March 2, 2005
CONTACT: Chris Paulitz

SENATOR HUTCHISON, COLLEAGUES SEND LETTER URGING STATE SALES TAX DEDUCTION EXTENSION
Senators attempting to extend deduction through budget resolution

WASHINGTON, DC -- Senator Kay Bailey Hutchison (R-TX) today sent the following letter to Senate Budget Committee Chairman Judd Gregg and Ranking Democrat Kent Conrad urging them to incorporate a state sales tax deduction extension into the Senate budget resolution. Sen. Hutchison led the fight to get the deduction reinstated in the 108th Congress. The letter follows:


March 2, 2005

The Honorable Judd Gregg
Chairman
Senate Budget Committee
624 Dirksen Senate Office Building
Washington, D.C. 20510

The Honorable Kent Conrad
Ranking Democrat
Senate Budget Committee
624 Dirksen Senate Office Building
Washington, D.C. 20510

Dear Chairman Gregg and Ranking Democrat Conrad:

We are writing to express our strong support for including an extension of the deduction for state sales taxes in the FY 2006 budget resolution to be reported by your committee.

The deduction for state sales taxes was included in last year’s American Jobs Creation Act to restore fairness to the tax code. Reinstating this deduction eliminates any Federal bias regarding the type of taxes a state uses for its revenue source. However, this deduction is only in effect for 2004 and 2005, while the deduction for state income taxes is not subject to a similar sunset. In order to prevent this inequality from returning, we ask that a permanent extension of the sales tax deduction be included in the revenue assumptions for this year’s budget.

We look forward to working with you as this year’s budget is developed to ensure that this deduction is permanently extended, so no citizen has to pay taxes on their state and local taxes.

Sincerely,

Senator Kay Bailey Hutchison Senator Maria Cantwell
Senator Tim Johnson Senator Mel Martinez
Senator Patty Murray Senator Bill Nelson
Senator John Thune

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