Media Coverage

Washington Post: Expiring Sales Tax Deductions Could Cost Taxpayers Big in These States

Taxpayers who itemize state taxes on their federal taxes could find themselves out of luck if those deductions fall victim to congressional budget talks. Without congressional action, which appears unlikely, those deductions will expire at the end of the year.

That means fewer deductions and higher federal taxes for residents in states that rely more on sales taxes than income taxes for revenue, according to a new analysis from the Pew Charitable Trusts.

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About 11 million filers claimed $17 billion in state and local sales tax deductions in 2011, according to Pew’s analysis of Internal Revenue Service statistics.

“Federal and state tax policy is really closely intertwined,” said Anne Stauffer, the director of Pew’s Fiscal Federalism Initiative and an author of the report. Though the expiration will only have a $17 billion impact — a relative drop in the bucket in terms of national gross domestic product — “it’s pretty concentrated in terms of impact.”

Read the full article at washingtonpost.com

Projects:
Fiscal Federalism Initiative
Issues:
Federal Impact, Local Taxes, Sales Tax
 
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