OLYMPIA, Wash. – Unless Congress acts, 2011 will be the last year Washington residents were able to deduct sales tax from their federal income tax returns. Governor Chris Gregoire signed onto a letter Tuesday asking Congressional leaders to reauthorize the deduction for 2012.
In 2009, nearly 850,000 Washingtonians claimed the sales tax deduction. The average write-off was more than $2,000. This year, the estimate is Washington taxpayers will save more than $400 million combined in federal taxes. Mike Gowrylow is with Washington’s Department of Revenue. He says that equates to nearly 4,000 jobs saved in Washington.
Mike Gowrylow: “If you leave that $406 million in the state it has a multiplier effect as people spend that money on goods and services in Washington that preserves jobs and generates more tax revenue for the state.”
The sales tax write-off works one of two ways. A taxpayer can claim a standard deduction based on income and other factors. Or itemize each receipt at the end of the year. The sales tax deduction was authorized in 2004 to provide people in states that don’t have an income tax equal treatment under the federal tax code.
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