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Deductibility of State and Local Property, Sales and Income Taxes

The provision of the federal income tax code that allows taxpayers to deduct their state and local tax payments from their federal taxable income is a fundamental statement of the historical right of state and local governments to raise revenues and taxpayers not to be double taxed.

Deductibility preserves the ability of state and local governments to raise revenues and to provide services, promotes equity in the federal taxing system, discourages the migration of businesses and individuals for tax purposes, avoids excessive cumulative federal/state/local income tax rates, and preserves the autonomy of state and local governments.

The GFOA again urges the Congress and the Administration to recognize that states and local governments are not special interest groups, but are an integral part of the nation's total governmental structure of which the federal government is the other part.

For the reasons stated above, the Government Finance Officers Association (GFOA) opposes the elimination, in whole or in part, of the deductibility provision of the federal income tax code.

Adopted: May 28, 1985