The Senate Finance Committee on Thursday supported a two-year extension of a tax deduction for sales tax payments for residents of Washington and seven other states with a sales tax but no income tax.
The measure, included in a larger bill dealing with tax credits, would extend the credit by two years through 2013.
The bill now heads to the full Senate and House. Washington Sen. Maria Cantwell, a member of the finance committee, said Thursday’s 19-5 bipartisan support offers a hopeful sign that lawmakers will deal with the tax deduction and related issues in September, following an upcoming recess. “It shows we can work together to do tax reform legislation,” Cantwell, a Democrat, said in a phone interview.
Nearly 850,000 Washingtonians took advantage of the state and local sales tax deduction in 2009, the last year of available data from the Internal Revenue Service, Cantwell’s office said. The state’s residents reduced their taxable income by more than $1.8 billion that year. The state’s taxpayers received tax breaks of around $400 million, or an average of almost $500 per tax filer, the senator’s office said.
Cantwell said in an interview that the measure is of particular importance to Clark County, since it reduces the incentive to shop tax-free in Oregon.