House votes for permanent sales tax deduction

WASHINGTON — The House voted Thursday to make permanent the IRS deduction for state and local sales taxes, a benefit targeted to residents of Nevada and a handful of other states that lack an income tax.

The 272-152 vote signaled that lawmakers look favorably on the tax break that is used extensively in the Silver State, but that has been renewed only year to year.

“Making permanent the state and local sales tax deduction not only simplifies the tax process, it also provides more certainty and tax fairness,” said Rep. Dina Titus, D-Nev.

Titus voted for the bill, along with Republican Reps. Joe Heck, Cresent Hardy and Mark Amodei.

Its future remained cloudy, however. The White House this week said President Barack Obama would veto the bill because it was not offset with savings elsewhere and would add $42 billion to the deficit over 10 years.

However, the bill approved Thursday could wind up as part of a broader package of tax reforms. Some Democrats on Thursday criticized Republicans for advancing individual tax bills when they said there is a need for comprehensive changes in the tax system.

Taxpayers under current law can choose to deduct either the state income tax they pay or their sales taxes. The choice is easy in Nevada and other states that have no state income tax.

Besides Nevada, the sales tax break is widely used by residents of Wyoming, South Dakota, Washington, Texas, Florida and Tennessee.

In 2012, the most recent year for numbers from the IRS, 280,000 Nevadans claimed the sales tax deduction — 22 percent of taxpayers in the state.

Advocates of the deduction for sales taxes said the vote was a matter of fairness.

“We should be fair and say, if the income tax deduction is permanent, the sales tax deduction is permanent as well,” said Rep. Steve Stivers, R-Ohio.

Contact Review-Journal Washington Bureau Chief Steve Tetreault at stetreault@reviewjournal.com or 202-783-1760. Find him on Twitter: @STetreaultDC