Senator Maria Cantwell’s Weekly Update for Washington State
Monday, January 30, 2006
Keeping America Competitive
Investing in Alternative Energy to Break America’s Dependence on Foreign Oil
Enhancing Security Without Slowing Commerce or Travel
Putting Money Back into the Pockets of Washington Taxpayers
As Washingtonians begin receiving their W-2 forms, I want to make sure everyone remembers to take advantage of the sales tax deduction. Taxpayers across our state are facing the strain of sky-high energy, education, and health care costs. The sales tax deduction is a good way for them to get hard-earned money back into their wallets. In most states, taxpayers are allowed to deduct state income tax from their federal taxes. However, residents of states with a higher sales tax in place of state income taxes have not been allowed a sales tax deduction since changes to the tax code were made in 1986. In 2004, I worked to pass provisions to promote tax fairness and allow Washington state taxpayers to deduct state and local sales taxes from their annual federal income tax returns. Last year, Washingtonians used the deduction to claim $2 billion on their tax returns. Taxpayers who took advantage of the cut saved an average of over $500 each. This is about tax fairness. Without this deduction, Washingtonians get taxed twice—once when they make a purchase and again when they file their tax returns. With the sales tax deduction expiring after the 2005 tax season, I’m leading the fight to make it permanent.
The IRS has posted tables and instructions at http://www.irs.gov/pub/irs-pdf/i1040sa.pdf. See page 11 for the Washington state table. There is a fact sheet on the sales tax deduction at http://www.irs.gov/newsroom/article/0,,id=152316,00.html.