By J. Lyn Carl, GalleryWatch.com
Austin, TX –
U.S. Senators Kay Bailey Hutchison (R-Texas) will join Congressman Kevin Brady (R-The Woodlands) and others Wednesday to announce legislation that will make permanent the state sales tax deduction.
The announcement will be during a 10 a.m. (CST) press conference in Room S-211 of the U.S. Capitol.
The American Jobs Creation Act that was passed last year in Congress included a provision allowing taxpayers in states without income taxes - Texas among them - the option of deducting state and local sales taxes. The current provision will expire after 2005 without congressional action.
Texas Comptroller Carole Keeton Strayhorn estimates that not being able to deduct state and local sales taxes has cost Texas taxpayers $740 million per year and has impacted the state's economy by costing it more than 16,500 jobs per year.
Strayhorn estimates that an average Texas family that itemizes their federal income taxes will save $310 per year by being allowed to deduct local and state sales tax in 2005. She said a family of four with a median annual income of $57,945 could potentially have an additional tax deduction of $928. She also projects that the net tax savings might generate more than 16,000 new jobs and $923 million in increased Gross State Product in 2005. Texas sales tax receipts would probably increase by as much as $38 million, because Texans would have more income to spend, said Strayhorn.