U.S. Senator Lamar Alexander (R-Tenn.) said today that passage of a bipartisan amendment he cosponsored brings Congress one step closer to making the state and local sales tax deduction permanent, which would put more than $400 each year in the pockets of nearly 600,000 Tennesseans.
“The state and local sales tax deduction will mean on average $400 in tax relief for nearly 600,000 Tennesseans,” Alexander said. “That’s good news for our state’s economy and for family budgets. We need a permanent fix for this, and this amendment passing today puts us on track to do just that.”
Alexander has been a strong supporter of making these provisions permanent. In October, Alexander voted for the Tax Extenders and Alternative Minimum Tax Relief Act of 2008, which included a two-year extension of the deduction for state and local sales taxes. Alexander also is a cosponsor of bills introduced by Senators Maria Cantwell (D-Wash.) and Kay Bailey Hutchison (R-Texas) to make that deduction permanent. Today, the Senate passed an amendment offered by Senate Majority Leader Harry Reid (D-Nev.) and cosponsored by Alexander that makes room in the Fiscal Year 2010 budget for legislation to make the state and local sales tax deduction permanent.
Tennesseans don’t pay a state income tax on wages. In order to be treated fairly with other states whose residents are allowed to deduct their state income taxes from their federal income taxes, Alexander said Tennesseans should be able to deduct their sales tax payments. Nationwide, state and local sales tax collections account for about a quarter of total state tax revenue, which is about the same as property taxes and income taxes. But the current provision allowing Americans to deduct state and local sales taxes from their federal income tax return is not permanent.
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