WASHINGTON, DC – Today, U.S. Senators Maria Cantwell and Patty Murray (D-WA) hailed Senate passage of a bill that includes their proposed extension of the state and local sales tax deduction. This itemized deduction allows taxpayers in states without an income tax to deduct the sales tax they pay.
“This provision assures tax fairness for Washington state’s working families,” said Senator Cantwell. “Especially in these tough economic times, it is important to know that Washington state residents will be treated equally at tax time. My long-term goal in the Senate is to make this deduction permanent.”
“This extension puts money back into the pockets of hard-working Washington families,” said Senator Murray. “Especially now, we need to help families make every dollar stretch at tax time as they struggle to afford mortgage, college and car payments. This measure means that next year our state won’t bear an unequal tax burden and our families will have some measure of certainty in their financial future.”
For nearly two decades, Washington taxpayers were penalized because the federal tax code did not allow deduction of state and local sales taxes. That disparity ended in 2004 when Senators Cantwell and Murray successfully restored the deduction. For the first time since 1986, taxpayers in Washington and other states that have no state income tax were able to deduct sales taxes from their federal income tax. But the extension was never made permanent, requiring repeated approval by Congress. Cantwell and Murray have led the effort each year to ensure that the deduction is extended. They will continue to work to see this deduction made permanent. This extension will expire at the end of 2010.
The provision was passed as part of the American Worker, State and Business Relief Act (AWSBRA) of 2010. AWSBRA also provided an expansion of unemployment insurance, COBRA health insurance coverage to laid-off workers, and other assistance to states.