President Signs State Sales Tax Deduction Into Law

Cantwell comments on tax fairness for Washingtonians

WASHINGTON, D.C. – U.S. Senator Maria Cantwell (D-WA) released the following statement after the President signed the bill this morning that contains tax fairness for Washington state residents. Cantwell was a lead sponsor of the legislation that allows Washington state taxpayers to deduct state and local sales taxes from their federal income taxes for the first time since 1986.

"After nearly twenty years, tax fairness is finally returning to Washington state," Cantwell said. "This tax relief is long overdue for Washington state families, and it will pump hundreds of millions of dollars into our economy that for years have been unfairly collected by the IRS."

This morning the President signed into law the American Jobs Creation Act, HR 4520. That bill includes Cantwell and Congressman Brian Baird's (D-WA-03) provision that will give Washington state residents an average tax cut of $519 to $575. The state Department of Revenue estimates that residents should save almost $500 million per year, giving the state's economy a substantial boost.

Currently, in most other states, taxpayers are allowed to deduct state income tax from their income that is taxed by the federal government. However, residents of states that have no state income tax but have a higher sales tax have not been allowed a sales tax deduction since changes to the tax code were made in 1986. The change affects seven states, including Washington.