McMorris Supports Passage of Bill to Extend State Sales Tax Deduction

The sales tax deduction provision creates parity among states by allowing all taxpayers the option to deduct their state sale taxes in lieu of their state and local income taxes. The Americans Job Creation Act of 2004 restored the sales tax deduction for residents of Washington and eight others states that do not have a state income tax. In 2004, the deduction was utilized by over 925,000 Washington taxpayers, who were able to keep more than $500 million of their hard earned dollars.

Other tax extenders in the bill include the Research and Development tax credit, above-the-line deduction for higher education expenses, treating combat pay as earned income for purposes of the earned income credit calculation, and above-the-line deduction for out-of-pocket teacher classroom expenses.

H.R.6408 also allows for exploration of the Outer Continental Shelf (OCS), which will increase our domestic oil and natural gas supply. The United States is currently the only developed nation in the world that does not allow energy production off its shores. Exploration in the OCS will also help Eastern Washington farmers who currently suffer from high fuel and fertilizer costs, as natural gas is a key component in the production of fertilizer.

The Legislation also provides a number of tax credits for the production and use of renewable energy products and for having energy efficient buildings and homes.

H.R. 6408 contains a number of provisions to improve Health Savings Accounts, which has the potential of creating more options and lowering health insurance costs for individuals. The legislation allows rollovers from health Flexible Spending Accounts and Health Reimbursement Account into Health Savings Accounts, and also allows for a one-time rollover from Individual Retirement Accounts into Health Savings Accounts.

A fix to Medicare physician payments is also included in H.R. 6408. It provides a payment update for all physicians in 2007 and provides an additional payment for physicians that report quality measures to ensure both continued beneficiary access and improved quality of care. In addition, it extends several expiring provisions including those applicable to rural payments to physicians, direct payments to independent laboratories for physician pathology services, wage index reclassifications, and Medicare reasonable cost payments for lab tests in small rural hospitals.