Cantwell calls for extension of state and local sales tax

Sen. Maria Cantwell, D-Wash., called for Congress to extend the state and local sales tax deduction during a recent Senate finance committee hearing.

The deduction , which expired at the end of 2011, provides tax fairness to residents of Washington and seven other states without an income tax, according to a news release.

The federal income tax deduction for state and local sales taxes is available for 2011 tax returns but its extension remains unclear for future tax years. This means that as of Jan. 1, residents in states without a state income tax don’t know if they’ll be able to claim the state sales tax deduction for 2012 qualifying spending.

“It was in the tax code for decades,” Cantwell said during the hearing. “And yet every year we have to play this game about whether or not we are going to have the equity that other states have.”

For 2009, the most recent year of published IRS data, nearly 850,000 Washingtonians took advantage of the deduction and reduced their taxable income by over $1.8 billion, according to a news release. The $1.8 billion in deductions translated into $500 million or more staying in the Washington state economy instead of going to the U.S. Treasury.

http://www.tri-cityherald.com/2012/02/02/1808670/cantwell-calls-for-exte...