WASHINGTON — The House on Thursday passed a bill to make the state and local sales tax deduction permanent.
The bill, known as the State and Local Sales Tax Deduction Fairness Act or H.R. 622, passed by a vote of 272-152. Thirty-four Democrats, many of whom are from states without income taxes, joined 238 Republicans in voting for the legislation.
The state and local sales tax deduction is taken in lieu of the state and local income tax deduction. It is a temporary tax provision known as a "tax extender" and it expired at the end of last year.
Rep. Kevin Brady, R-Texas, who introduced the legislation, said that the bill "is about tax fairness, equal treatment and certainty for hardworking taxpayers in states without an income tax. It is time to make this temporary provision permanent so families can count on keeping more of their paycheck each year."
He added that the bill "removes any incentive for sales tax states to argue to add an income tax." States that do not tax income from wages include Nevada, Washington, Wyoming, South Dakota, Tennessee, Florida and Texas.
A similar bill, S. 126, was introduced in January the Senate by Sen. Dean Heller, R-Nev. It is cosponsored by Democratic and Republican Senators from states without income taxes. It's pending before the Senate Finance Committee.
The Office of Management and Budget said that President Obama would veto H.R. 622 if he were presented with it, noting that the bill does not have an offset and would add to long-term deficits.
The Joint Committee on Taxation estimated that if enacted, the bill would cost $42.4 billion from fiscal years 2015 to 2025.
"The bill violates the very standard that House Republicans approved just last month in their budget resolution, which requires offsetting the cost of any tax extenders that are made permanent with other revenue measures," OMB said.
