Vol. 3, No. 4          December 15, 2005

Nevada's Online State News Journal

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Federal Tax Break For Nevadans Might Be In The Works

An Extension Of Sales Tax Deduction Aimed At Silver Staters

A tax cut bill making its way through Congress contains an extension of the sales tax deduction for Nevadans and the residents of seven other states. The tax break was scheduled to end following the current 2005 tax year.

Nevada and other states that do not have a state income tax are included in the measure. Residents living in states that collect a state income tax are allowed to deduct that tax from their federal tax. The sales tax reduction was a feature of the federal income tax for many years, was then dropped, and was resurrected recently. Whether or not it becomes a permanent deduction isn't known at this time.

The Senate has already passed the necessary legislation to extend the life of the deduction and the measure is included in a bill before the House of Representatives at this time. The bill is a massive tax reduction measure and is becoming more and more political as it moves through committees. At this time Congressmen Jon Porter and Jim Gibbons, both Republican are in favor of the measure. Congresswoman Shelley Berkley, a Democrat has voted against the tax measure.

According to tax experts, the sales tax deduction is used mostly by those that itemize their returns. People who buy large ticket items should keep all their sales tax records. Furniture, vehicles, and home repairs are generally expensive and sales tax can be considerable.

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