Dear Friend,
There are countless reasons why we love living in Texas. One of those reasons is that as residents we don’t pay a state income tax.
Since we don’t have a state income tax, Texans have been able to, over the last several years, deduct state and local sales taxes when filing their federal income tax returns. This provides some parity with other states who can deduct their state and local income taxes when filing their returns.
For the tax returns you will file by April you will still be able to deduct your sales taxes from your 2013 federal income taxes, but because Congress failed to renew the sales tax deduction before the end of last year, this could have an impact on your future tax returns in the year ahead.
That is why I am working with several of my House colleague to fix this problem before it becomes an issue. I am co-sponsoring legislation, H.R. 2854, that would simply “amend the Internal Revenue Code to make permanent the taxpayer election to deduct state and local general sales taxes in lieu of state and local income taxes.”
A partial reason for the delay in extending this important deduction is that both Houses of Congress are working on a comprehensive tax reform package. Unfortunately, tax reform may not be completed before this session of Congress wraps up at the end of the year and that is where the concern lies for us who live in states where this deduction could have a large financial impact on our constituents.
This is a simple, but important fix that Congress must make before the end of the year. I will keep you posted on what I am doing to reach a successful resolution to this issue.
Sincerely,
Kay Granger
Member of Congress