Gibbons Supports Federal Sales Tax Deduction

Gibbons Supports Federal Sales Tax Deduction
11/16/2005

House Ways and Means Committee Chairman Heeds Gibbons' Advice

WASHINGTON, DC -- A long-time supporter of allowing Nevadans the ability to deduct their sales tax from their federal income tax returns, Congressman Jim Gibbons (R-Nev.) today praised the House Ways and Means Committee, and Chairman Bill Thomas (R-Calif.) for the passage of the sales tax deductibility amendment, to be included in the Tax Relief Extension Reconciliation Act of 2005. Taxpayers have long had the ability to deduct state and local income taxes on the federal returns. Last year, Congress, with Gibbons' strong support, allowed taxpayers in states with no state income tax, like Nevada, to similarly deduct their sales tax.

"I am pleased that Chairman Thomas, and my colleagues on the House Ways and Means Committee, included this important amendment that will return Nevada's taxpayer dollars to the state," said Gibbons. "I have been a long time supporter of sales tax deductibility and look forward to voting to extend this fair tax provision when this legislation comes to the House floor."

In a letter addressed to House Ways and Means Committee Chairman Bill Thomas, Congressman Gibbons and over 60 of his House colleagues encouraged the committee to support, and make permanent, the sales tax deductibility option. The amendment included in the final bill extends the existing law by one year. Although it does not make this option permanent, it one step closer toward achieving the final goal.

Below is the text of the letter sent to the House Ways and Means Committee Chairman.

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Text of Congressional Letter to House Ways and Means Chairman Bill Thomas:

As the House Ways and Means Committee continues its tax reform agenda for the 109th Congress, we would like to express our continued support for making permanent state sales tax deductibility. We believe that as long as taxpayers have the ability to deduct their state and local income taxes, then preserving the right of taxpayers to deduct their state and local sales taxes must also be part of the tax code.

We greatly appreciate your leadership and past efforts to ensure equity and fairness for all American taxpayers. A great success in this effort was reached last year with the inclusion of the Sales Tax Equity Act that was signed into law as part of your American Jobs Creation Act. The Sales Tax Equity Act restored fairness to the tax code by restoring for two years the deduction of state and local sales taxes in lieu of state and local income taxes.

The option for taxpayers in all states to deduct, using either tables created by the IRS or receipts, the higher of their state and local income or sales tax from the individual's federal income tax burden is a critical component of tax fairness. Sales tax deductibility also provides a direct economic boost to consumers, especially middle income families. Furthermore, studies show that thousands of new jobs will be created as a result of meaningful deductibility.

We have worked diligently with you over the past several years in a bipartisan effort to put fairness and equity back in our tax system. We offer our assistance to ensure that meaningful deductibility continues to provide the tax fairness and economic stimulus that America deserves.

http://wwwc.house.gov/gibbons/display-pr.asp?id=1789