U.S. Reps.

Phil English, R-3rd, and Earl Pomeroy, D-N.D., this week introduced legislation to make the $4,000 income tax deduction for higher education expenses permanent.In June 2001, as a part of the Economic Growth and Tax Relief Reconciliation Act of 2001, Congress created a tax deduction for higher education expenses. Beginning in 2002, taxpayers could deduct a certain amount of tuition and education expenses from their federal tax return.Originally, English noted, this tuition deduction was to expire at the end of 2005, but Congress extended the deduction through 2007 in the Tax Relief and Health Care Act of 2006, which became law in December 2006.This deduction is taken "above-the-line," meaning that taxpayers can claim the deduction regardless of whether they claim the standard deduction or itemize deductions when filing their income tax return. The deduction was limited to $3,000 through 2003.The limit increased to $4,000 in 2004 and the maximum deduction has remained at $4,000.The legislation would make the current levels for the higher education deduction permanent. The bill has 34 cosponsors.———State Sen.

Don White, R-41st, is reintroducing three bills that were not enacted in the prior session.These bills include legislation to encourage mergers of volunteer fire departments; require confiscation of false ID cards; and, clarify tax laws regarding bank mergers.White's legislation to encourage regionalization and partnership efforts among private departments, would establish a program funded by a portion of the $100 million bond issue approved in 2002 for the purpose of improving volunteer fire and emergency services.White's bill to crack down on the use of false ID cards would require any person who is authorized to sell alcoholic beverages to confiscate an identification card when they have a reasonable suspicion that it is fraudulent.Confiscated identification cards would be forwarded to law enforcement.Also on White's agenda is a measure that clarifies the bank shares tax should not be imposed upon the goodwill generated under the purchase method of accounting for acquisitions.In 2001, the Financial Accounting Standards Board issued a ruling that made purchase accounting mandatory for business combinations after June 30, 2001.As a result of the purchase accounting rules, taxable equity and goodwill are now taxable when banks are merged."This change is necessary as banks headquartered in Pennsylvania are taxed for 'goodwill' while other states with similar bank tax structures do not impose the tax on goodwill," White said."By taxing goodwill, Pennsylvania is encouraging banks to move headquarters out of state. Moreover, banks who remain headquartered in Pennsylvania find this tax to be a discouragement for future mergers and acquisition."