Senate panel OKs 15th extension of sales tax deduction

WASHINGTON – A federal income tax deduction valuable to Washington state residents easily passed a Senate committee Thursday despite concerns that its temporary status is bad for the economy.

The tax law allowing residents of Washington and other states without an income tax to deduct some of their state and local sales tax was included in a larger bill on tax breaks.The proposed extension applies to federal tax returns filed next year and in 2016. This year’s filings are covered under a bill passed in 2012.

A similar group of tax breaks was proposed by Senate Democrats last December but didn’t garner enough Republican support. Although the latest bill was noncontroversial enough to pass on a voice vote, Finance Committee Chairman Ron Wyden, D-Ore., said the committee won’t consider any more legislation extending the tax deductions if this bill passes.

Congress has renewed the extension 15 times, Wyden said, and it’s time to reform the tax code instead.

“Their stop-and-go nature obviously contributes to the lack of certainty and predictability America needs to create more family-wage jobs,” Wyden said. “It doesn’t have to be this way.”

At one point during the hearing, Sen. Maria Cantwell, D-Wash., proposed an amendment to make the sales tax deduction permanent. But like most amendments proposed in the hearing, it failed.

“The 24 percent of Americans who claim state and local sales tax deductions shouldn’t constantly have to question whether they will be able to make that deduction,” Cantwell said.