By Gary Martin - San Antonio Express-News
Published: 01-09-09
WASHINGTON — Texas lawmakers wasted no time Tuesday in filing bills in the House and Senate that would make permanent a federal deduction of sales taxes for those filing in states without an income tax — a measure that would save Lone Star State taxpayers $1.2 billion a year.
Sen. Kay Bailey Hutchison R-Texas and Rep. Kevin Brady R-The Woodlands filed similar bills in their respective legislative chambers on the first day of the 111th Congress.
They are similar to bills filed in the last Congress when lawmakers agreed only to extend the deduction for two years. It was the second extension since the deduction was first granted in 2004.
Lawmakers in eight states that do not levy individual state income taxes say it is unfair that their residents do not receive a permanent federal deduction even though the states collect revenue from sales taxes.
“The money that people must give to one level of government should not also be taxed by another level of government” Hutchison said.
Moreover Hutchison said federal tax law “should not provide an incentive for states to establish income taxes over sales taxes.”
A bipartisan majority of Texas lawmakers have favored previous bills to make the sales tax deduction permanent.
The deduction would save Texans roughly $1.2 billion a year on average $520 per filer claiming the deduction according to the Texas comptroller in Austin.
The current extension of the deduction lasts through 2009.
Other states that do not levy an income tax are Alaska South Dakota Florida Nevada Tennessee Washington and Wyoming.
Lawmakers from those states have favored a permanent extension of the sales tax deduction as well.
Opposition to the bill has come from the inability of supporters to get 60 votes in the Senate to cut off debate and under budget rules to provide corresponding cuts to offset the loss of revenue.
Hutchison said repeated action by Congress to extend the deduction shows lawmakers from other states recognize the inequity in the tax code.
