Cantwell and Bipartisan Group of Colleagues Call on Congress to Allow Tax Cut for Washingtonians
Cantwell: State Residents Deserve Tax Relief Now
WASHINGTON, D.C. – Surrounded by a bipartisan group of more than 25 senators and representatives, U.S. Senator Maria Cantwell (D-WA) today called on Congress to immediately pass her tax relief legislation that could give Washington state residents a tax cut of over $500 per year. Cantwell's bill is part of a larger JOBS bill and would allow Washington's state and local sales taxes to be deducted from federal income taxes.
Currently, in most other states, taxpayers are allowed to deduct state income tax from their income that is taxed by the federal government. However, residents of states that have no state income tax but have a higher sales tax have not been allowed a sales tax deduction since changes to the tax code were made in 1986. The change affects seven states, including Washington.
Cantwell's bill, the Sales Tax Equity Act (S. 467), would give Washington state residents an average tax cut of $519 to $575. The state Department of Revenue estimates that residents would save a total of $421 million per year, giving the state's economy a big boost.
As of now, the tax cut is only in one version of the "American Jobs Creation Act" and the tax cut would only apply through 2005. The bipartisan group of members of Congress from the seven affected states called today for the tax cut to be included in the final version of the bill, which Cantwell hopes will pass Congress soon. Cantwell will still work to make the tax cut permanent.
Cantwell's full statement follows below:
"First, I would like to pay a special thank you to Congressman Brian Baird for working so hard on this issue over several years in the House of Representatives.
"Make no mistake about it: restoring the sales tax deduction is a tax cut for Washington state taxpayers that will strengthen our economy and restore basic tax fairness.
"When the federal income tax was first imposed in 1913, Congress allowed taxpayers to deduct state and local taxes so individuals would not be taxed twice.
"In 1986 after 74 years of precedent, taxpayers from states without income taxes were given a raw deal when Congress made a budgetary squeeze play and ended the tax deduction for state sales taxes.
"For states like Washington where sales tax revenues are nearly 60 percent of the state budget, the impact is huge.
"The loss to Washington state taxpayers this year alone is approximately $421 million. This double standard is an unfair penalty that hurts Washington state families.
"Washington taxpayers have waited 18 years to correct this unique burden.
"Since coming to the Senate, I have worked to restore tax equity for taxpayers by bringing back the sales tax deduction.
"In fact, when I entered the Senate in 2001, one of my first legislative acts was to cosponsor this sales tax deduction legislation and today, Senator Hutchinson and I are the lead sponsors in the Senate.
"Now we are on the cusp of the sales tax deduction being restored.
"The House needs to quickly appoint conferees and the Conference Committee should move swiftly to return a Foreign Sales Corporation/Extra-Territorial Income bill with the bipartisan and bicameral sales tax deduction intact.
"And once we pass the sales tax deduction back into law we need to work to make it permanent so that never again are taxpayers from Washington state or any other state unfairly singled out to pay higher taxes."
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