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Congressional Inaction May Doom Sales Tax Deductions

Flickr- John Boehner

Washington State taxpayers who claim local and state sales tax deductions on their federal income tax filing could be in for a rude surprise next year. The short version is, Congress hasn't done anything about extending so-called tax extenders this year. And the sales tax deduction provision, along with many other such tax breaks, expired at the end of last year.

According to a Pew Charitable Trust research project, nearly 28 percent of Washington tax filers claim itemized sales tax deductions on their federal returns. The average per filer is just over 600 dollars.
Until this year, Congress has almost routinely extended the tax extenders package, but unless leaders push the issue after it returns from a long election break in the fall, Washingtonians will lose that benefit - in essence, absorbing a tax increase.

Neighboring Oregon has no state sales tax, but senior Senator Ron Wyden, who is chair of the Senate Finance Committee, is pushing for action. He fears that Oregon wine grapes could go unpressed unless a provision to speed up equipment depreciation is renewed in the tax extenders package.

A two-year extension of the sales tax deduction would cost the federal treasury an estimated $6.5 billion over 10 years.

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