WASHINGTON, DC – Today, U.S. Senators Patty Murray (D-WA) and Maria Cantwell (D-WA) along with Majority Leader Harry Reid (D-NV) and Senator John Ensign (R-NV) introduced an amendment to the Senate’s Fiscal Year 2010 Budget Resolution that would make the state sales tax deduction permanent, a key to providing tax-relief to middle class Americans. Including the extension of this deduction in the budget blueprint is a clear signal that this legislation will be a priority for Congress this year. The U.S. Senate will begin debating the Budget Resolution this week.
"Washington state’s hard-working families deserve tax fairness,” said Cantwell. “Congress must make a permanent state sales tax deduction a priority in the 111th Congress, rather than taking a piecemeal approach to providing relief to families that are watching prices rise and wages fall every day. In this time of economic uncertainty, it is more important than ever to make sure Washington families get a permanent and predictable deduction that returns hard-earned cash to their wallets to help with everything from college tuition, to rising energy costs, to health care expenses. The Administration’s tax package provides a welcome focus on predictability by proposing to make certain tax cuts permanent. The congressional budget resolution should enable the same kind of predictability to the taxpayers of Washington state and other states that have no individual income tax.”
“A budget is a statement of priorities and including the sales tax deduction lets families across Washington know that we are putting their needs first,” Senator Murray said. “Many families across our state are afraid to make major purchases right now. Ensuring that the state sales tax deduction will still be there helps Washington families afford to buy a car, make a home improvement or spend elsewhere. Especially when times are tough, we should be doing all we can to help families make ends meet and have the confidence to put money back into the local economy.”
This deduction is real money for real families: an average of $600 more in the pockets of Washington state taxpayers. In 2006, more than 880,000 Washingtonians claimed this deduction and 49 percent of them made less than $75,000. The state sales tax deduction increases economic growth by drawing in new businesses, creating new jobs, and keeping more money in the state. According to the June 2008 Washington Economic and Revenue Forecast, taxable sales totaled almost $31.3 billion in the fourth quarter of 2007. This was 5.7 percent higher than the previous year. Taxable sales in the state of Washington have now increased on a year-over-year basis for twenty-two consecutive quarters.
Last year, Cantwell worked to give Washington families and businesses the ability to claim the deduction through 2009. In 2004, Cantwell fought to restore a deduction for the general state and local sales taxes as part of the tax code. For the first time since 1986, taxpayers in states like Washington that have no state income tax were able to deduct the sales taxes they pay. Unfortunately, unlike the deduction for state income taxes, the deduction for state sales taxes is temporary. As a member of the Senate Finance Committee, Cantwell has led the effort each year to ensure that the deduction is extended and will continue to work to see this deduction made permanent.