Cantwell Secures 2-Year Extension of the State Sales Tax Deduction

Press Release

Cantwell Secures 2-Year Extension of the State Sales Tax Deduction
Average Washington Taxpayer Will Save $600 a Year

Today, U.S. Senator Maria Cantwell (D-WA), who has led the fight to bring tax relief to Washington families, announced passage of a tax relief measure that includes extension of the state sales tax deduction for two additional years by a vote of 93 to 2 in the Senate. Washington families and businesses will now be able to claim the deduction, which Cantwell worked to include in the overall package, through 2009.

"This is about tax fairness for Washington state's working families and building a stronger economy," said Cantwell, a member of the Senate Finance Committee. "I am thrilled we have extended these tax breaks, which means money back in the pockets of hard-working Washington families, for two more years. Now, Congress needs to make it a priority to make this deduction permanent, rather than taking a piecemeal approach to providing relief to families that are feeling squeezed every day by prices that go up and wages that are not rising."

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.

In 2004, Cantwell fought to restore as part of the tax code, a deduction for the general state and local sales taxes. 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. 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. The deduction expired at the end of 2007. Taxpayers have been left in the dark with respect to 2008 and are awaiting definitive action by the Congress.

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