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Budget and Revenue Committee

March 3, 2006

The Honorable Charles Grassley
United States Senate
135 Hart Senate Building
Washington, D.C. 20510-1501

Subject: H.R. 4297: Tax Relief Extension Reconciliation Act of 2005

Dear Senator Grassley:

As you seek agreement on the Tax Relief Extension Reconciliation Act of 2005 (H.R. 4297), the National Conference of State Legislatures (NCSL) expresses its strong support for the deduction of state and local general sales taxes and urges you to make the deduction permanent.

The 1986 Tax Reform Act disallowed the itemized deduction of state and local sales taxes. This action placed the sales tax, the most significant source of historic state revenues, at a disadvantage to other sources of state revenue, while favoring the citizens of one state over those of another. Congress temporarily remedied this unequal treatment with the American Jobs Creation Act of 2004. As a matter of tax equity, it is imperative that Congress treat the states and their citizens as equals and make permanent the deductibility of state and local general sales taxes in lieu of state and local income taxes.

Thank you for your consideration of NCSL’s position on this issue. For additional assistance and information, please have your staff contact Molly Ramsdell (202-624-3584; molly.ramsdell@ncsl.org) or Garner Girthoffer (202-624-7753; garner.girthoffer@ncsl.org) in NCSL’s Washington, D.C. office.

Sincerely,
Delegate John Doyle
West Virginia Legislature
Chair, NCSL Budgets and Revenue Standing Committee

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