MONTGOMERY -Governor Bob Riley continues urging legislators to vote on his compromise tax relief proposal that cuts the state sales tax on groceries while preserving the federal income tax deduction for over 98 percent of taxpayers.

Earlier Thursday the Senate did not take up a bill that would remove the state sales tax on groceries. However, that bill would also eliminate taxpayers’ ability to deduct the federal income taxes they pay from their state income taxes.  There remains only one meeting day left in this legislative session.

“Both sides want to cut the sales tax on food and our compromise proposal does that.  It cuts the sales tax on food and keeps the federal tax deduction for over 98 percent of taxpayers.  The other proposal takes that deduction away from everyone.  Our proposal is better,” said Governor Riley.

The Governor first presented his compromise proposal to legislators more than a week ago.

A summary of the Governor’s proposal is below. A more detailed summary is attached.

· Cut sales taxes on groceries

· Cut income taxes for the middle class

· Expand access to affordable health insurance

· Change the law to establish 4-year property reappraisals

Governor Riley’s compromise proposal would cut the state sales tax on groceries while preserving the federal income tax deduction for over 98% of taxpayers. The Governor’s compromise plan also would raise the income tax threshold from $12,500 to $15,500 for a family of four, provide tax breaks to small business owners and employees to make health insurance more affordable, and give the people the chance to vote on a Constitutional amendment to establish four-year property appraisals. This compromise plan is revenue neutral, meaning it will have no impact on the FY 2009 budget.

Gov. Riley's Compromise Tax Relief Plan