WASHINGTON, DC – Today, U.S. Senator Maria Cantwell (D-WA), who has led the fight to bring tax relief to Washington families by securing extension of the state sales tax deduction, announced along with Senator Patty Murray (D-WA) that a bipartisan tax agreement will give Washington state taxpayers this needed tax relief for two additional years.  The measure that will extend the sales tax deduction through 2009 is expected to pass the Senate later this week.

“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 have been working hard with my Senate colleagues and as a member of the Senate Finance Committee to move the tax package through Congress, and I am thrilled we have extended these tax breaks for two more years. I will continue to fight to make this deduction permanent. Congress needs to make it a priority to provide some relief to families that are feeling squeezed every day by prices that go up and wages that are not rising.” 

 

U. S. Senator Patty Murray, a member of Senate Leadership stated, “The inclusion of the sales tax deduction in this package is great news for Washington state families who will be able to breathe a sigh of relief knowing that they will be treated fairly at tax time next year. Senator Cantwell’s leadership on the Finance Committee made this possible and I will work with her to both pass this through the Senate and to fight to make this critical deduction permanent. With gas and food prices on the rise and markets in decline we should be looking to do everything we can to give our working families some relief.”

 

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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