Monday, October 01, 2012

State Sales Tax Deduction (7 states)

Most of the States in the U.S. use a state income tax as a means of taxing their citizens.  This income tax is deductible from federal taxes on schedule A of the form 1040.  Seven states use a sales tax instead of an income tax as a way of taxing citizens of their respective states.  Passed under the previous congress, these Seven states were finally allowed to deduct their state taxes also (just like the 43 states deduct their income tax).....That is now on the chopping block!!!!
Congress to save the day?
A bipartisan group of House lawmakers are urging the House Way and Means Committee to approve legislation that would extend the federal tax deduction for state and local taxes as part of any tax extenders package considered during the upcoming lame-duck session of Congress.  Without the deduction, taxpayers living in states without income taxes face higher federal taxes burdens, Rep. Kevin Brady, R-Tex., and Rep. Jim McDermott, D-Wash., said in the letter. “The sales tax deduction saves taxpayers in our states millions of dollars per year and is a vital component of our states’ economies, spurring growth and creating jobs,” the letter reads.