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A group of 13 House Democrats and Republicans from Florida are urging the state’s two senators to push for renewal of a special tax break that saves Florida residents as much as $1 billion a year.
That law allows residents of Florida and six other states without income taxes to deduct state and local sales tax from their federal taxable income.
The break has been renewed every two years. But it expired a the end of 2007 and so far has not been renewed by the Senate for the 2008 as the two-year congressional session moves to its December conclusion. The House has passed legislation that would do so.
Along with Florida, the special break lowers federal tax bills for some residents in six other states that also don’t have income taxes - Tennessee, Nevada, Texas, Washington, South Dakota and Wyoming.
Before the sales tax deduction was re-enacted in 2004 (it had been eliminated in 1986) these states argued that they were treated unfairly by the federal tax code, because citizens in most other states could deduct state and local income taxes.
“We have heard from constituents who are increasingly concerned about whether or not they will be able to use this deduction,” state the letter to Sen. Mel Martinez, a Republican, and Sen. Bill Nelson, a Democrat. The letter was circulated by Rep. Ginny Brown-Waite of Brooksville and also signed by Tampa Bay areas reps. Adam Putnam of Bartow and C.W. Bill Young of Indian Shores, among other House members from Florida.
“Providing Florida residents with the assurance of an extension of the state sales tax deduction will let our constituents know make decisions about their future – including major purchases that can stimulate our economy, such as cars, appliances and home renovations,” the letter states.
Rough estimates put the actual tax savings for Floridians at about a third of the total amount they were able to reduce their adjusted gross incomes by with the sales tax deduction, or about $1 billion.
But that is difficult to precisely determine, because the amount a taxpayer is able to deduct is set by a formula, and that other deductions also play roles in determining how much each taxpayer ultimately pays.
Reporter Billy House can be reached at bhouse@mediageneral.com
That law allows residents of Florida and six other states without income taxes to deduct state and local sales tax from their federal taxable income.
The break has been renewed every two years. But it expired a the end of 2007 and so far has not been renewed by the Senate for the 2008 as the two-year congressional session moves to its December conclusion. The House has passed legislation that would do so.
Along with Florida, the special break lowers federal tax bills for some residents in six other states that also don’t have income taxes - Tennessee, Nevada, Texas, Washington, South Dakota and Wyoming.
Before the sales tax deduction was re-enacted in 2004 (it had been eliminated in 1986) these states argued that they were treated unfairly by the federal tax code, because citizens in most other states could deduct state and local income taxes.
“We have heard from constituents who are increasingly concerned about whether or not they will be able to use this deduction,” state the letter to Sen. Mel Martinez, a Republican, and Sen. Bill Nelson, a Democrat. The letter was circulated by Rep. Ginny Brown-Waite of Brooksville and also signed by Tampa Bay areas reps. Adam Putnam of Bartow and C.W. Bill Young of Indian Shores, among other House members from Florida.
“Providing Florida residents with the assurance of an extension of the state sales tax deduction will let our constituents know make decisions about their future – including major purchases that can stimulate our economy, such as cars, appliances and home renovations,” the letter states.
Rough estimates put the actual tax savings for Floridians at about a third of the total amount they were able to reduce their adjusted gross incomes by with the sales tax deduction, or about $1 billion.
But that is difficult to precisely determine, because the amount a taxpayer is able to deduct is set by a formula, and that other deductions also play roles in determining how much each taxpayer ultimately pays.
Reporter Billy House can be reached at bhouse@mediageneral.com