Tennesseans Equipped With New Sales-Tax Deduction

February 11, 2005, Now that we have received W-2 forms from our employers, it's time to start thinking about filing our tax returns. Many have already started this task, others have not. Regardless of whether you are eager to start this chore, you should know that you have another deduction at your disposal.

Thanks to a new law I helped pass through Congress, Tennesseans who itemize can now deduct their state and local sales taxes when filing their federal income tax returns. This is a long-overdue measure that provides some relief and fairness to families who live in our great state.

I worked hard in Congress, along with other members of the state's congressional delegation, to get the sales-tax deduction passed into law. Although it's just a temporary measure, we will be pushing hard to make the sales-tax deduction permanent.

To keep the sales-tax deduction simple, people who itemize can choose to use a set of standard tables developed by the Internal Revenue Service. If you believe the deduction on those tables are too low, you can keep up with your receipts instead.

If you choose to use the IRS tables, go the agency's Web site and look for Publication 600 or go here to my Web site and download the tables. The IRS tables are based solely on state sales tax rates, so those who pay local sales tax will have to do a little extra math using the worksheet in Publication 600.

Until 1986, taxpayers were allowed to deduct state sales taxes on their federal returns. The state sales tax deduction was repealed in 1986 to broaden the tax base, but the state income tax deduction was retained.

Allowing Tennesseans to deduct the state's sales taxes from their federal income tax returns is only fair. Not only does it put more money back in the pockets of hard-working families, but it also boosts the entire state's economy by creating jobs. I will not be satisfied until this deduction is a permanent part of the tax code.