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Washington, DC - Congressman Gene Green today introduced HR 689, the Sales Tax Equitability Act, important legislation which would eliminate the discrimination faced by individuals who live in states that have no state income tax.
“This legislation would provide fairness for all Americans by ensuring that, in states like Texas, where there is no income tax, state and local sales taxes are treated the same as income taxes,” said Green. “The legislation I am introducing today would allow residents of states with no income tax to deduct their sales tax from their federal income tax.”
Under current law, individuals can deduct their state income tax from their federal income tax. Unfortunately, in many states like Texas, which has no state income tax, residents are not eligible for this deduction. Even though they pay state sales taxes that are equitable to income taxes in other states, these individuals are penalized because they don’t pay a state income tax.
“This situation is patently unfair,” added Green. “Texas residents have carried more than their fair share of the load and it’s time we recognized that.”
The bill would direct the IRS to publish simple and fair tax tables, indexed for inflation, to calculate an individual's or family's deduction in each respective state, based on family income and number of dependents. This would prevent taxpayers from having to maintain a shoe box of sales receipts to deduct their state and local sales taxes.
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