Washington, D.C. - Today the U.S. House of Representatives passed a one-year extension of state and local sales tax deduction pushed by Texas Congressman Kevin Brady. The deduction is set to expire at the end of this year. Extending the deduction saves Texas taxpayers more than $1 billion a year.   

Congressman Brady led the bi-partisan effort in the House to restore the state and local sales deduction in 2004 after an 18-year lapse. He is pushing to make the deduction permanent.   

“Working families in Texas and across America  will pay less to Uncle Sam this year because they can deduct their state and local sales taxes”, said Brady who is a member of the tax-writing Ways and Means Committee.  “Sales taxes add up, and this deduction keeps more money in the family budget.”

According to Texas State Comptroller Susan Combs, the sales tax deduction saves Texans $1.2 billion a year, or an average of $520 per filer claiming the deduction.  It is associated with 15,700 to 25,700 jobs and $1.1 billion and $1.4 billion in gross state product.

“Since we reinstated the sales tax deduction, more and more Texans are saving money by itemizing their federal returns,” said Congressman Brady.   Nearly a quarter more Texans are itemizing, and the largest group is those making less than $50,000 a year. “That means more middle income families in Texas are seeing their tax bill get smaller”.  

Since 2004, residents of Texas, Tennessee, Florida, Nevada, South Dakota, Washington and Wyoming have been able to claim a deduction on their federal income tax for state and local sales and motor vehicle taxes they have paid, giving them a tax break similar to residents of other states, who can deduct their state income tax from their federal income tax.

In addition to the sales tax deduction, the bill passed by the House today also includes relief for Texans facing high property taxes.   The bill increases the standard deduction for property owners by $350 for single filers and $700 for joint filers.