INCLUDES PROVISION SOUGHT BY STEARNS TO EXTEND DEDUCTION OF STATE SALES TAXES

Washington, Dec 8, 2005 - "We must maintain the pro-growth polices that continue to promote our strong economic expansion," said Rep. Cliff Stearns (R-Ocala).  "I am grateful for the support I received in extending the tax deduction for state and local sales taxes, which is a matter of fairness for the people of Florida and others states without an income tax."

The House today approved H.R. 4297, the Tax Relief Extension Reconciliation Act of 2005, which extends a number of expiring tax-relief provisions.  The measure extends for one year the deduction for state and local sales taxes sought by Stearns, who got the support of the entire Florida delegation last year in support of the deduction.  Explained Stearns, "Nine states, including Florida, do not have income taxes, using, instead, a state sales tax. The Tax Reform Act of 1986 had ended the deduction for state and local sales taxes, but provided for the deduction of state income taxes, creating an unfair situation for those in states without income taxes.  Last year, we succeeded in restoring this deduction, which we are extending for another year."

H.R. 4297 also extends the reduced tax rates on capital gains and dividend income through 2010.  According to the Joint Committee on Taxation, over 60 percent of Americans receiving capital gains or dividend income have incomes of $100,000 or less and stand to benefit from the passage of today's bill.  It also extends the research & development tax credit, the above-the-line deduction for higher education expenses and out-of-pocket teacher classroom expenses, the Welfare-to-Work tax credit, and the higher expensing limit for small businesses.