04.17.06

On Tax Day, Cantwell Reminds Washingtonians to Take Full Advantage of Sales Tax Deduction

WASHINGTON, DC – U.S. Senator Maria Cantwell (D-WA) is reminding Washingtonians to take advantage of the sales tax deduction on their federal income taxes. The deduction allows Washington state taxpayers who itemize to deduct state and local sales taxes when filing their federal tax returns.

“With tax day here, Washingtonians should remember to take full advantage of this deduction to receive the refund they’re due,” said Cantwell. “This is more than a benefit for individual taxpayers. It’s about fundamental tax fairness for businesses and hard-working Americans alike. Without the deduction, taxpayers in our state get taxed twice—once when they make a purchase and again when they file their taxes—and our state’s small businesses face an uneven playing field when competing with retailers in states like Oregon that don’t charge a sales tax. Congress is well on its way to making this deduction permanent, and I’m going to keep pushing to make sure it gets signed into law, giving Washington’s economy an added boost.”

In most other states, taxpayers can deduct state income taxes from their total income taxed by the federal government. However, between 1986 and 2004, residents of states with a sales tax but no state income taxes went without a similar deduction. In 2004, Cantwell worked with a bipartisan group of senators and representatives to pass legislation creating a sales tax deduction. Currently, the deduction is set to expire at the end of the 2005 tax season. However, in February, on a 75-25 vote, the Senate called for the addition of a permanent sales tax deduction to a pending tax bill in the final stages of working its way through Congress. To promote tax fairness, Cantwell will continue fighting to get this important provision signed into law.

In 2004, the tax cut saved Washingtonians over $500 million, with almost 850,000 taxpayers taking advantage of the deduction. The Washington State Economic and Revenue Forecast Council estimated that during 2004 and 2005, the deduction would help create 3,000 jobs and produce hundreds of millions of dollars in economic stimulus.

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