o Previously: Congress extended sales tax deductibility for residents of Washington and six other states three times since 2004 with bipartisan support. The House passed another extension last spring; it stalled in the Senate.
o What’s new: An effort by U.S. Sen. Patty Murray to win a one-year extension of sales tax deductibility failed on the Senate floor Wednesday when Republicans refused to support her compromise proposal.
o What’s next: Congress has adjourned until after the election but the Senate could take up the measure in a lame-duck session in November.
Despite a last-ditch attempt by U.S. Sen. Patty Murray at a compromise with Republicans, the Senate adjourned late Wednesday without extending sales tax deductibility — a tax break that’s worth $350 million to $500 million a year for Washington families.
o Previously: Congress extended sales tax deductibility for residents of Washington and six other states three times since 2004 with bipartisan support. The House passed another extension last spring; it stalled in the Senate.
o What's new: An effort by U.S. Sen. Patty Murray to win a one-year extension of sales tax deductibility failed on the Senate floor Wednesday when Republicans refused to support her compromise proposal.
o What's next: Congress has adjourned until after the election but the Senate could take up the measure in a lame-duck session in November.
In 2007, more than 975,000 Washington residents used the deduction, according to the Internal Revenue Service.
But legislation that allows residents of Washington and six other states to deduct state sales tax payments from their federal income tax expires at the end of this year. The House passed an extension of the tax break last spring, but Republicans have filibustered a companion bill in the Senate since June.
Murray took to the floor of the Senate on Wednesday night to offer Republicans a compromise — a fully paid-for bill that would have extended the sales tax deduction for one year. But the Republican leadership refused to support it.
“I reached across the aisle to bring forward a compromise bill that would help families in Washington state — and that Senate Republicans had agreed to just two nights ago — but they stood up and said no,” Murray said after the compromise failed to get unanimous consent.
Senate Republicans proposed a similar resolution Monday that would have granted a permanent extension of the tax break. That too failed to win unanimous consent, in part because the bill did not include a way to pay for it.
Dino Rossi’s campaign blasted Murray after the GOP measure failed. Rossi is challenging Murray for her Senate seat.
“Instead of finishing the work the people of Washington state elected her to do, Sen. Murray opted instead to put politics first and gamble with the jobs and paychecks of every Washingtonian,” Rossi said in a statement.
“Unfortunately, Sen. Murray chose not to use her leadership clout to prevent this tax increase and allowed the issue to die in favor of election-year partisan games,” echoed the Washington State Republican Party.
Murray was willing to support the GOP measure, said her spokesman, Eli Zupnick. But Sen. Max Baucus, D-Montana, who chairs the Senate Finance Committee, opposed it because he preferred to include sales tax deductibility in a larger package of tax cut extensions that he had been crafting for months.
“Sen. Murray supports a permanent extension, but the GOP bill did not have unanimous support,” Zupnick said.
Murray then went to Baucus and negotiated an agreement to introduce a resolution for a self-standing one-year extension of sales tax deductibility, which she introduced Wednesday evening on the House floor.
“Frankly, this issue shouldn’t be controversial and the livelihoods of middle-class families shouldn’t be used as a political football in election-year games,” Murray said in a floor speech.
But Sen. John Thune, R-S.D., blocked the resolution, and it failed to win unanimous consent.
Murray campaign spokeswoman Julie Edwards called the Republicans’ refusal to support the extension “a shocking display of political gamesmanship.” “For the last several months, Patty Murray has been working with the majority in the Senate to pass an extension,” she said. “The fully-paid-for measure had the support of 59 senators, but it was being filibustered by Republicans. This is an issue that has never been a partisan issue in the past, but this year Republicans have chosen for partisan reasons to simply block it.”
Rossi’s campaign said Murray offered a bill no one had seen or had a chance to read.
But Edwards said the bill was 73 words long and nearly identical to the bill Republicans had introduced two days earlier.
The Senate stayed in session for three more hours after Murray’s compromise failed, giving the GOP an opportunity to reconsider, she said.
“That was ample time for Dino Rossi to get on the phone and ask his GOP colleagues to get on board with tax relief for Washington state,” Edwards said.
She noted that Rossi “never said one word about the sales tax deductibility issue” in his campaign until this week.
U.S. Rep. Brian Baird, D-Vancouver, who has led the effort in the House to make the sales tax deduction permanent, said past extensions could not have succeeded without support from both parties.
“We couldn’t have passed it without a successful bipartisan coalition in the states affected,” he said. “We all know this makes sense, we know it’s good for taxpayers. Can’t we just set partisanship aside?”
