President Bush Friday signed a corporate tax overhaul bill that allows residents of Texas and six other states to deduct sales taxes from federal tax returns.
The state comptroller's office says in 2004 the deduction could save $408 for an average Texas family that itemizes.
But critics say the deduction would primarily benefit higher-income taxpayers because they tend to be the ones that itemize.
The overall bill is the most sweeping rewrite of corporate tax law in nearly two decades. It showers $136 billion in new tax breaks on businesses, farmers and other groups.
The bill was initially intended to end a bitter trade war with Europe. But supporters say its expansion was critical to help beleaguered manufacturers who have suffered almost three million lost jobs over the past four years.
Opponents charged that the package had grown into a massive giveaway that will complicate the tax system and reward multinational companies that move jobs overseas.