Dear Friend,

In January, I first wrote to you about an important tax deduction that would expire at the end of this year if Congress didn’t act.

In Texas, since we don’t have a state income tax, we are able to deduct state and local sales taxes when filing federal income tax returns. This provides some parity with other states who can deduct their state and local income taxes when filing their returns.

Over the past two weeks, the House and Senate both passed an extension of this deduction, and President Obama signed it into law on Friday. While this is not a permanent solution, it does prevent a tax increase on Texans.

I believe that when the new Congress convenes in January comprehensive tax reform needs to be part of the agenda, including making this deduction permanent. By doing so, it will erase future uncertainty about whether or not Texans will face a tax increase.

In addition to extending this tax deduction, Congress passed the Achieving a Better Life Experience (ABLE) Act. This bill will help those with disabilities to save money for education, housing, and medical expenses to use at a future time. By allowing those with disabilities and their caretakers to set up a tax-free savings account, they will be able to better manage the cost of care.

Sincerely,
Kay Granger