[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2683 Introduced in House (IH)]
107th CONGRESS
1st Session
H. R. 2683
To amend the Internal Revenue Code of 1986 to allow a deduction for
State and local sales taxes in lieu of State and local income taxes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
July 31, 2001
Mrs. Cubin (for herself, Mr. Baird, Mr. Brady of Texas, Mr. Hilleary,
and Mr. Clement) introduced the following bill; which was referred to
the Committee on Ways and Means
_______________________________________________________________________
A BILL
To amend the Internal Revenue Code of 1986 to allow a deduction for
State and local sales taxes in lieu of State and local income taxes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Sales Tax Equity Act of 2001''.
SEC. 2. DEDUCTION OF STATE AND LOCAL GENERAL SALES TAXES IN LIEU OF
STATE AND LOCAL INCOME TAXES.
(a) In General.--Subsection (b) of section 164 of the Internal
Revenue Code of 1986 (relating to definitions and special rules) is
amended by adding at the end the following:
``(5) General sales taxes.--For purposes of subsection
(a)--
``(A) Election to deduct state and local sales
taxes in lieu of state and local income taxes.--
``(i) In general.--At the election of the
taxpayer for the taxable year, subsection (a)
shall be applied--
``(I) without regard to the
reference to State and local income
taxes,
``(II) as if State and local
general sales taxes were referred to in
a paragraph thereof, and
``(III) without regard to the last
sentence.
``(B) Definition of general sales tax.--The term
`general sales tax' means a tax imposed at one rate
with respect to the sale at retail of a broad range of
classes of items.
``(C) Special rules for food, etc.--In the case of
items of food, clothing, medical supplies, and motor
vehicles--
``(i) the fact that the tax does not apply
with respect to some or all of such items shall
not be taken into account in determining
whether the tax applies with respect to a broad
range of classes of items, and
``(ii) the fact that the rate of tax
applicable with respect to some or all of such
items is lower than the general rate of tax
shall not be taken into account in determining
whether the tax is imposed at one rate.
``(D) Items taxed at different rates.--Except in
the case of a lower rate of tax applicable with respect
to an item described in subparagraph (C), no deduction
shall be allowed under this paragraph for any general
sales tax imposed with respect to an item at a rate
other than the general rate of tax.
``(E) Compensating use taxes.--A compensating use
tax with respect to an item shall be treated as a
general sales tax. For purposes of the preceding
sentence, the term `compensating use tax' means, with
respect to any item, a tax which--
``(i) is imposed on the use, storage, or
consumption of such item, and
``(ii) is complementary to a general sales
tax, but only if a deduction is allowable under
this paragraph with respect to items sold at
retail in the taxing jurisdiction which are
similar to such item.
``(F) Special rule for motor vehicles.--In the case
of motor vehicles, if the rate of tax exceeds the
general rate, such excess shall be disregarded and the
general rate shall be treated as the rate of tax.
``(G) Separately stated general sales taxes.--If
the amount of any general sales tax is separately
stated, then, to the extent that the amount so stated
is paid by the consumer (other than in connection with
the consumer's trade or business) to the seller, such
amount shall be treated as a tax imposed on, and paid
by, such consumer.
``(H) Amount of deduction to be determined under
tables.--
``(i) In general.--The amount of the
deduction allowed under this paragraph shall be
determined under tables prescribed by the
Secretary.
``(ii) Requirements for tables.--The tables
prescribed under clause (i)--
``(I) shall reflect the provisions
of this paragraph,
``(II) shall be based on the
average consumption by taxpayers on a
State-by-State basis, as determined by
the Secretary, taking into account
filing status, number of dependents,
adjusted gross income, and rates of
State and local general sales taxation,
and
``(III) need only be determined
with respect to adjusted gross incomes
up to the applicable amount (as
determined under section 68(b)).''.
(b) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after the date of the enactment of
this Act.
<all>
Introduced in House
Introduced in House
Referred to the House Committee on Ways and Means.
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