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Governor Applauds New Federal Tax Relief For Floridians

12/30/2004

Benefiting residents of Florida and six other states without state personal income tax, the 2004 American Jobs Creation Act, endorsed by Governor Bush, authorizes the sales tax relief as an added option for taxpayers itemizing deductions.

"This new law extends to Floridians the same tax benefits long enjoyed by residents of states that tax personal income," said Governor Bush. "Allowing residents to deduct state sales taxes on federal returns will put more money back into the pockets of hard-working families."

Americans in most states have long been able to deduct state income taxes from their federally-taxable income when calculating how much of their earnings are subject to federal income tax. Since Florida and six other states -- Alaska, Nevada, South Dakota, Texas, Washington and Wyoming -- have no state personal income taxes, residents were unable to claim a similar deduction.

Beginning with the 2004 federal income tax, Florida residents can claim the new sales tax deduction by:

Retaining receipts from purchases of items subject to Florida sales tax and claim the total amount of sales tax paid as a deduction.

Determining a standard deduction using the Internal Revenue Service's new Optional State Sales Tax Tables as an alternative to saving receipts throughout the year.

As a supplementary benefit, Floridians may also add any sales tax paid on a motor vehicle, aircraft, boat, home or home building materials to the standard deduction.

Floridians wishing to take advantage of the new deduction should consult the IRS or their tax-preparation professional. For more information on the available deduction and to view the Optional State Sales Tax Tables issued just last week, visit the IRS web site at www.irs.gov.

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