01.07.09

Cantwell Makes Permanent Sales Tax Deduction Top Priority for New Congress

Cantwell introduces bipartisan legislation to save Washington state residents an average of $600 per year, create jobs, and grow businesses

WASHINGTON, DC – As Congress returned to Washington D.C. this week, U.S. Senator Maria Cantwell (D-WA) introduced legislation to make the state sales tax deduction permanent to help address some of the serious economic challenges facing our country and the people of Washington state. As a member of the U.S. Senate Finance Committee, which oversees tax-related legislation, Cantwell is well-positioned to guide her permanent sales tax deduction through the 111th Congress.
 
“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.”
 
Cantwell’s legislation is cosponsored by U.S. Sen. Patty Murray (D-WA), Majority Leader Harry Reid (D-NV), Sen. John Ensign (R-NV), Sen. Lamar Alexander (R-TN), and Sen. Bill Nelson (D-FL).
 
“A permanent sales tax deduction is an economic stimulus for Washington state,” said Senator Murray.  “That’s because it puts money directly into the pockets of middle-class families, reduces the tax burden, and supports job growth. Washington families have waited far too long for tax fairness and there has never been a better time to act to provide them with the peace of mind they deserve.”
 
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. 
 
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