Davis votes for Tobacco Buyout and Tennessee Sales Tax Exemption ProvisionJune 17, 2004

WASHINGTON, D.C. -- U.S. Rep. Lincoln Davis (TN-4) today sided with his constituents and the residents of Tennessee by approving a tobacco buyout and sales tax deduction provision in H.R. 4520, the American Jobs Creation Act.

"Many Democrats worked extremely hard to be sure a tobacco buyout and a sales tax exemption provision was included in the House bill," said Davis. "I challenge and encourage the Republican leadership, who will control the subsequent Senate-House conference committee, to keep these two provisions in the conference report."

H.R. 4520 repeals the Extraterritorial Income Tax exclusion to comply with the sanctions being imposed by the European Union. The legislation also allows for a long awaited and desperately needed tobacco buyout. The $9.6 billion dollar buyout will be spread out over five years, paying quota owners $7 per pound and growers $3 per pound. In 1986, Congress repealed a provision that allowed states without a state income tax to deduct sales tax from federal income tax. H.R. 4520 would restore the sales tax deduction, thus easing the tax burden for millions of Tennesseans.

"The tobacco buyout and sales tax deduction will greatly aid many of my constituents," Davis said.
"Tobacco farmers, who have seen their income cut in half, have been asking for assistance through a buyout for years. I have worked on numerous buyout bills in the past year and a half, when it comes down to it I supported our farmers and rural people."

Davis, a staunch supporter of repealing the prohibition on deducting sales tax from federal income tax, had previously worked on bi-partisan legislation that would permanently ease the burden many Tennesseans are shouldering. States that do not have a state income tax include Alaska, Florida, Nevada, South Dakota, Tennessee, Texas, Washington, and Wyoming.

"I would like to have a permanent repeal of the 1986 prohibition," Davis said. "I will continue to fight for permanent tax relief for Tennesseans."

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