The national union of state and local government employees has endorsed the proposed deductibility of state sales taxes at the federal level.
In a June 16 letter to representatives in the U.S. House, Charles M. Loveless, director of legislation for the American Federation of State, County, and Municipal Employees (AFSCME), wrote, “We strongly support a provision in the legislation [HR 4520] providing for deductibility of state sales taxes.
“Our Union strongly supports the deductibility of state income and sales taxes,” the letter continued. “States, cities, and counties are an integral part of our federal system of government. Americans depend upon state and local governments to provide vital public services, and it is extremely important for state and local taxes to be deductible on federal income tax returns,” Loveless wrote.
AFSCME has not endorsed HR 4520, however, because it disapproves of other provisions.
Tennessee to Benefit
According to a June 29 report in The Tennessean, a Congressional Research Service analysis estimated Tennesseans would save up to $472 million on their 2004 income taxes if deductibility of state and local sales taxes is authorized.
Tennessee Deputy Revenue Commissioner Reagan Farr said the state economy will feel the effects if the measure becomes law. “Any time you pump an extra $200 to $300 million into the state economy, there’s going to be some net positive impact,” Farr said.
Senator Lamar Alexander (R-Tennessee) has promised to lobby for final passage of HR 4520. “This is a matter of simple fairness since citizens in other states are allowed to deduct their state income tax payments,” Alexander said.
John Skorburg is managing editor of Budget & Tax News. His email address is [email protected].
