Congressman Fincher Introduces Legislation to Provide Tax Relief to Tennesseans

Press Release

Congressman Stephen Fincher (R-Frog Jump) today introduced legislation that would create a permanent federal income tax deduction for state and local sales taxes paid by Tennessee residents and other states, which have no general state income tax.

In 2011, over 556,000 Tennessee filers claimed the deduction for state and local sales tax and reduced their taxable income by $1.23 billion. The sales tax deduction simply puts Tennessee, along with eight other states affected, on a level playing field with the rest of the country, who can deduct their state income taxes from their federal tax obligation.

"Making the sales tax deduction permanent is about fairness and will put more money back into the pockets of hardworking Tennesseans," said Congressman Fincher. "This deduction will help fuel Tennessee's economy by keeping money in the state and giving taxpayers the certainty they need to plan ahead. It will not only help generate jobs, it will also promote investment in local economies and attract new business."

The current tax code contains a permanent federal tax deduction for income taxes, but omits a permanent sales tax deduction. As a result, Congress has temporarily restored the state and local sales tax deduction four times since 2004, but has yet to make it permanent. This bill would make it permanent. Unless Congress takes action, the current state and local sales tax extension will expire on January 1, 2014.

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