Washington, D.C. - A bill authored and fought for by U.S. Congressman Kevin Brady (R-The Woodlands) restoring the sales tax deduction to the federal tax code now heads to the House and Senate Chambers where leaders expect it to pass by week’s end.  The provision is a part of the conference report for the high profile international tax bill, the American Jobs Creation Act.

 

“This is a huge economic boost for Texas, where taxpayers will save approximately $1 billion a year, and it’s also an issue of fairness for states like ours. The tax code shouldn’t be biased in favor of income taxes,” said Brady a member of the House Ways and Means Committee and deputy whip. 

 

Once the measure becomes law taxpayers in all 50 states could choose to deduct either their state and local income or sales taxes, whichever is highest, for 2004 and 2005. Those choosing to deduct sales taxes could opt to take an average deduction determined by tables or claim a deduction based on actual receipts.

 

House Ways and Means Committee Chairman Bill Thomas stated, “Sales tax deductibility is a reality for taxpayers because of Kevin Brady's leadership and determination on this issue.  For years Congressman Brady has been a champion on the issue of sales tax deductibility.  In my view, he deserves the lion’s share of credit for bringing this issue to the table by pushing for a bi-partisan coalition in Congress and working this provision through Ways and Means Committee."

 

Brady also praised House Majority Leader Tom DeLay, a member of the conference committee, with playing a pivotal role in ensuring the sales tax provision remained in tact and a part of the jobs bill.

 

“Tom Delay has played a critical role on this issue because he is determined to see fairness for sales tax states, which is great news for Texas taxpayers,” said Brady.

Preliminary estimates from the Texas State Comptrollers office indicate that restoring this measure could keep $1 billion in Texas pockets and create over 16,000 jobs annually.  Additionally, the Comptroller projects $590 million in new investments and $874 million increase in gross state product.  Other states could be expected to benefit comparably.