[Congressional Bills 103th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4233 Introduced in House (IH)]
103d CONGRESS
2d Session
H. R. 4233
To amend the Internal Revenue Code of 1986 to allow a taxpayer to elect
to deduct either State and local income taxes or State and local sales
taxes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
April 14, 1994
Mr. Sundquist 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 taxpayer to elect
to deduct either State and local income taxes or State and local sales
taxes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. ELECTION TO DEDUCT STATE AND LOCAL INCOME TAX OR STATE AND
LOCAL SALES TAX.
(a) In General.--Section 164(a) of the Internal Revenue Code of
1986 (relating to deduction for taxes) is amended by adding after
paragraph (5) the following new paragraph:
``(6) At the election of the taxpayer, either--
``(A) State and local income taxes, or
``(B) State and local general sales taxes.''.
(b) General Sales Taxes.--Section 164(b) of such Code (relating to
definitions and special rules) is amended by adding at the end the
following new paragraph:
``(5) General sales taxes.--
``(A) In general.--The term `general sales tax'
means a tax imposed at one rate in respect of the sale
at retail of a broad range of classes of items.
``(B) 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
in respect of some or all of such items shall
not be taken into account in determining
whether the tax applies in respect of a broad
range of classes of items, and
``(ii) the fact that the rate of tax
applicable in respect of 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.
``(C) Items taxed at different rates.--Except in
the case of a lower rate of tax applicable in respect
of an item described in subparagraph (B), no deduction
shall be allowed under this section for any general
sales tax imposed in respect of an item at a rate other
than the general rate of tax.
``(D) Compensating use taxes.--A compensating use
tax in respect of an item shall be treated as a general
sales tax. For purposes of the proceeding sentence, the
term `compensating use tax' means, in respect of 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
subsection (a)(6) in respect of items sold at
retail in the taxing jurisdiction which are
similar to such item.
``(E) 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.
``(F) 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 (otherwise than in connection
with the consumer's trade or business) to his seller,
such amount shall be treated as a tax imposed on, and
paid by, such consumer.''.
(c) Conforming Amendment.--Paragraph (3) of section 164(a) of such
Code is amended by striking out ``State and local, and foreign,'' and
inserting in lieu thereof ``Foreign''.
(d) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 1992.
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