House Bill hb1963

    Florida House of Representatives - 2001                HM 1963

        By the Committee on Fiscal Policy & Resources and
    Representative Wallace





  1                          House Memorial

  2         A memorial urging the Congress of the United

  3         States to reinstate the federal income tax

  4         deduction for sales taxes paid.

  5

  6         WHEREAS, prior to 1986, American taxpayers were allowed

  7  to deduct state and local sales taxes paid from their federal

  8  income tax liabilities, and

  9         WHEREAS, the Tax Reform Act of 1986 repealed this

10  deduction, producing a growing inequity between taxpayers in

11  different states regarding the amounts they pay in federal

12  taxes, and

13         WHEREAS, citizens of 42 states may deduct state income

14  tax payments from their federal returns but more than 50

15  million Americans living in 9 states have no comparable

16  relief.  Seven states, Florida, Texas, Alaska, Wyoming,

17  Washington, South Dakota, and Nebraska, have no state income

18  tax. Two states, Tennessee and New Hampshire, impose an income

19  tax only on interest and dividends but not on wages, and

20         WHEREAS, taxpayers in these states are discriminated

21  against under federal tax laws simply because their states

22  have no income tax, and the Federal Government must strive to

23  avoid tax policies that favor residents of some states over

24  residents of others, and

25         WHEREAS, the ability to deduct state and local taxes is

26  based on the principle that levying a tax on a tax is unfair,

27  and federal law currently permits taxpayers to include

28  itemized deductions for state and local income taxes and

29  foreign income taxes, personal property taxes, real estate

30  taxes, self-employment taxes, certain business expenses and

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    Florida House of Representatives - 2001                HM 1963

    696-193-01






  1  occupational taxes, and taxes paid on rental property or

  2  royalty income, but not on state sales taxes, and

  3         WHEREAS, residents of states without state income taxes

  4  pay a greater percentage of taxes to the Federal Government

  5  than do residents of states with state income taxes, and this

  6  system means that two taxpayers with identical income and

  7  financial circumstances can have differing federal tax

  8  liabilities if they live in different states, and

  9         WHEREAS, since the creation of the federal income tax

10  in 1861 until 1986, the sales tax deduction had been accepted

11  as a necessary feature of federalism, and states should have

12  the right to decide for themselves how they want to collect

13  their revenues without interference from the Federal

14  Government, and

15         WHEREAS, allowing taxpayers to deduct either their

16  state and local income tax or state and local sales taxes paid

17  in a given year would restore equity and fairness across the

18  states, NOW, THEREFORE,

19

20  Be It Resolved by the Legislature of the State of Florida:

21

22         That the Congress of the United States is respectfully

23  requested to reinstate the federal income tax deduction for

24  sales taxes paid.

25         BE IT FURTHER RESOLVED that copies of this memorial be

26  sent to the President of the United States, the President of

27  the United States Senate, the Speaker of the United States

28  House of Representatives, and to each member of the Florida

29  delegation to the United States Congress.

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