Cohen: Congress Approves TN Sales Tax Extension

WASHINGTON, D.C. – Congressman Steve Cohen (TN-09) today announced that Congress approved extending the State and Local Sales Tax Deductions for Tennesseans as part of the fiscal cliff agreement that Congress passed on January 1. This important tax provision was slated to expire at the end of 2012 -- which would have increased taxes for all Tennesseans. Congressman Cohen has been an ardent supporter of this tax deduction well before coming to Congress and signed onto a bipartisan letter to the House Ways and Means Committee requesting that the deduction be extended in September.  As a State Senator in Tennessee, Congressman Cohen personally lobbied President George W. Bush on this issue on behalf of his constituents.  Congressman Cohen was the only member of the Tennessee House delegation to support the measure.

“I’m proud to have worked in a bipartisan fashion to extend this critical tax deduction for my constituents and those in Tennessee’s other eight congressional districts,” said Congressman Cohen.  “Because Tennessee does not have a state income tax, our state and local sales taxes are inordinately high and place a significant financial burden on many of my constituents.  This sales tax deduction will save my constituents much needed money in these tough economic times by allowing them to deduct their state sales taxes from their federal income tax returns.  Since individuals in states with an income tax are able to deduct their state income tax, I believe it is only fair that Tennesseans should be granted equal footing and allowed to deduct their state and local sales taxes.”

Below is the bipartisan letter Congressman Cohen sent to Congressman Dave Camp – Chairman on Committee on Ways and Means – asking for the extension in any tax extenders package:

September 14, 2012

The Honorable Dave Camp                                              The Honorable Sander Levin

Chairman                                                                          Ranking Member

Committee on Ways and Means                                       Committee on Ways and Means                                                                       

U.S. House of Representatives                                         U.S. House of Representatives

Washington, D.C. 20515                                                  Washington, D.C. 20515

Dear Chairman Camp and Ranking Member Levin:

As the committee considers the various expired and soon-to-expire tax provisions, we encourage you to include an extension of the State and local sales tax deduction in any tax extenders package.  Extending the sales tax deduction is critical to ensuring equal tax treatment for residents of states that do not assess an income tax.

As you know, the sales tax deduction expired January 1, 2012.  If the deduction is not extended, millions of taxpayers living in states without an income tax will shoulder a larger share of the federal tax burden since they cannot claim the deduction for state income taxes.  The sales tax deduction saves taxpayers in our states millions of dollars per year and is a vital component of our states’ economies, spurring growth and creating jobs. 

Millions of middle-class families in Texas, Washington, Nevada, Florida, Tennessee, South Dakota, Wyoming and Alaska will face higher taxes if Congress does not act to extend the sales tax deduction.  The deduction was enacted in the American Jobs Creation Act of 2004 and has since enjoyed strong bipartisan support.   Over the past six years, it has been extended three times by bipartisan Congresses and has not once been allowed to lapse.

In recent months the sales tax deduction has continued to receive bipartisan support.  In April, Chairman Tiberi and Ranking Member Neal held a hearing on expiring tax provisions, during which a bipartisan group of members testified to extend the deduction and faced no opposition. 

We urge you and members of the Committee to maintain fairness and certainty in the tax code by extending the sales tax deduction.  Thank you for your consideration of this request and for your continued support of this issue. 

Sincerely,

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