Ways and Means Committee Approves Brady's Extension of Sales Tax Deduction
Ways and Means Committee Approves Brady's Extension of Sales Tax Deduction
Committee Also Expands Veterans Mortgage Bond Program
Washington, D.C. - A critically important issues for Texas - extension of the sales tax deductionis one step closer to becoming law after a late night Ways and Means Committee hearing to approve the measure authored by Congressman Brady as a part of H.R. 4297, the Tax Reconciliation Bill. Another amendment supported by Congressman Brady to expand Texas' Qualified Veterans Mortgage Bond Authority was also passed by Committee.
"It's an issue of fairness that Texas families be able to deduct every penny of state and local sales tax they pay throughout the year from their federal tax bill, especially when families in most states are deducting their state income taxes. With families in Texas spending money to repair homes and replace items damaged by Hurricane Rita, those receipts can add up, making this deduction even more important," said Brady who is a member of the Ways and Means Committee and deputy whip.
In 2004, Congressman Brady was successful in restoring the state and local sales tax deduction Congress eliminated in 1986. The restoration was limited to two years, tax years 2004 and 2005. The extension, adopted as an amendment to the Tax Reconciliation bill, would postpone the deadline one year until the end of 2006.
Congressman Brady's ultimate goal is to see the sales tax deduction made permanent. Once signed into law, the one-year extension would ensure that hardworking Texans can continue taking that deduction through 2006, while we work toward permanency.
Under the sales tax deduction taxpayers can choose from a table of average deductions or provide receipts, recommended in years when cars, appliances, and other big-ticket items are purchased.
Estimates from the Texas Comptroller's Office indicate that restoring the sales tax deduction could annually keep $1 billion in Texas pockets, save an average family of four roughly $300, and create nearly 16,000 jobs.
VETERANS MORTGAGE
Texas, along with California, Wisconsin, Oregon, and Alaska are currently authorized by Congress to issues tax-exempt qualified veterans' mortgage bonds, to finance mortgage loans to veterans. Currently, to qualify for mortgage loans financed by these bonds, veterans must have served on active duty before 1977 and apply for the mortgage financing within 30 years of their active service ending.
The amendment adopted by the Committee last night and authored by Congressman Paul Ryan (R-WI) and supported by Congressman Brady would allow veterans who served active duty after 1977 to qualify for mortgage loans financed by these bonds as long as they apply within 25 year after their active service ends.
"Expanding this program will help a new generation of American veterans to buy a home. For all they sacrifice to defend our country, it seems only right that we help them own a piece of the American Dream," said Brady.
The Committee approved Tax Reconciliation Bill now heads to the House floor for an up or down vote. Once approved by the House the bill will go to the Senate for consideration and passage.
http://www.house.gov/apps/list/press/tx08_brady/SalesTaxExtension.html