12.16.15

Cantwell, Murray Applaud Permanent Extension of State Sales Tax Deduction

For the first time a permanent state and local sales tax extension will ensure tax fairness and eliminate uncertainty for Washington families

WASHINGTON, D.C. – Today, Senator Maria Cantwell (D-WA) and Patty Murray (D-WA) applauded inclusion of a permanent state and local sales tax deduction in the tax extenders bill. Cantwell, a member of the Senate Finance Committee, and Murray introduced the bipartisan legislation to provide fairness for taxpayers in states that don’t have an income tax.

After numerous extensions of the state and local sales tax deduction and more than a decade of uncertainty, Washingtonians will now no longer face ambiguity on the status of their deductions.

“By making the state sales tax deduction a permanent part of the tax code, we end the long-term inequity for Washington taxpayers and provide certainty for the 25 percent of Washington tax filers who claim this deduction,” Cantwell said. “This bipartisan legislation helps working families and our economy -- it means an average of more than $600 back in the pockets of Washingtonians.”

“This is fantastic news for Washington state taxpayers who have faced far too much uncertainty for far too long,” Murray said. “With this deal, Washington state families will finally be treated fairly and will get the tax certainty they deserve. I’ve been fighting for this change with Senator Cantwell for years, and I am so glad that we were finally able to deliver this huge win for Washington state taxpayers in this bipartisan deal.”

Washington is one of eight states without an income tax including Alaska, Florida, Nevada, South Dakota, Tennessee, Texas and Wyoming. Because taxpayers in these eight states don’t pay a state income tax, they cannot claim an income tax deduction on their federal tax returns.

Since 2004, Cantwell and Murray have fought to make the state and local sales tax deduction permanent. Last year, Cantwell secured a one-year extension of the state and local sales tax deduction for 2014 that meant taxpayers were able to claim it on their April 2015 tax returns. In 2013, Senators Cantwelll and Murray co-sponsored a two-year extension of the sales tax deduction which was passed in the deal that Congress reached in averting the fiscal cliff.  

The state and local sales tax deduction is critical to Washington state taxpayers. Some 900,000 took advantage of the state sales tax deduction in 2012, reducing their taxable income by $1.9 billion, according to IRS data. Washington state taxpayers were able to save an average of $602 with the state sales tax deduction in 2012, according to a Pew Charitable Trusts report. 

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