In Spokane, Cantwell Touts Progress of New Bill to Extend State Sales Tax Deduction

850,000ians used state sales tax deduction to save $500 on average on federal tax returns

SPOKANE, WA – Today, U.S. Senator Maria Cantwell (D-WA) joined Spokane businesses and families to call for passage of a new bill that would extend the state and local sales tax deduction and key tax credits. Speaking at a Spokane car dealership, Cantwell highlighted how the deduction would save 850,000 Washingtonians an average of $500 in taxes.

“This is about restoring fairness for taxpayers in Spokane and around Washington state,” said Cantwell. “By extending this deduction we can put nearly $500 back into Washingtonians’ pockets. It’s time for the Senate to move forward on this new bipartisan agreement to provide certainty for Washington state taxpayers and businesses and support economic growth.”

Todd Tuflija, commercial sales manager at Dishman Dodge Chrysler, joined Cantwell to highlight the impact of the sales tax deduction on Washington businesses and taxpayers. Many Washingtonians will pay more in sales taxes on a vehicle than for any other single purchase. A resident of Spokane or Spokane Valley would pay approximately $890 in sales taxes on a vehicle that costs $10,000 – a significant deduction from their federal return. Sonja Carlson, a Spokane resident who claims the deduction, was also with the senator.

Last Thursday, Cantwell helped to advance the bipartisan bill that includes the sales tax deduction in the Senate Committee on Finance. The Family and Business Tax Cut Certainty Act passed the committee by a 19-5 vote. The bill now heads to the full U.S. Senate for a vote.

Under the agreement, the state and local sales tax deduction would be extended for two years, covering 2012 and 2013. Without an extension, Washington residents would no longer be able to deduct the sales taxes they pay from their federal income tax returns. Approximately 27 percent of Washingtonians take advantage of the sales tax deduction and reduced their taxable income by more than $1.8 billion.

Taxpayers in Alaska, Florida, Nevada, Tennessee, Texas, South Dakota, and Wyoming in addition to Washington used this deduction to reduce their taxable incomes by nearly $16 billion a year.

Cantwell has been a national leader on efforts to secure an extension. In March, Cantwell and Senator Marco Rubio (R-FL) introduced an amendment to extend the state and local sales tax deduction for one year.

On February 2nd, she also sent a letter with 14 other Senators to Senate Majority Leader Harry Reid, Senate Minority Leader Mitch McConnell, Senate Finance Committee Chairman Max Baucus, and Senate Finance Committee Ranking Member Orrin Hatch calling for an extension of the state and local sales tax deduction as part of a tax extenders package. Cantwell also secured an extension of the sales tax deduction in December 2010 – which expired at the end of 2011.

The bill also includes the extension of Cantwell-backed tax credits to encourage the hiring of returning veterans and wounded warriors, build low-income housing, and produce clean energy.