Restore sales tax deduction, regional officials tell federal government

A COALITION of local and regional officials last week called on the federal government to restore an IRS tax deduction that would allow residents of Washington and six other states to deduct the state sales tax as part of their federal tax return.

Federal law currently permits residents of states with an income tax to deduct the amount from federal returns. It, however, prohibits residents of states with a sales tax from taking a similar deduction.

Metropolitan King County Councilmember Julie Patterson, chair of the Council’s regional policy committee, said Washington state residents pay about $500 more a year in federal taxes compared to residents from states with an income tax.

“Taxpayers in Washington State are being penalized simply because this state does not have an income tax,” Patterson said.

“Washington residents are subject to a double standard at the federal level, and are unfairly subsidizing the federal treasury,” she added. “If others can deduct state income taxes, we should be able to deduct our state sales tax.”

Council Chair Cynthia Sullivan shared Patterson’s view. She said restoring the sate sales tax deduction at the federal level restores equity to the federal tax system.

“Each April, Washington residents filing their tax returns are reminded of this inequity,” Sullivan said. “We not only pay the federal income tax, but are penalized for not paying a state income tax.”

Until a 1986 Congressional amendment to the Internal Revenue Code, taxpayers in Washington, Florida, Nevada, South Dakota, Tennessee, Texas and Wyoming were allowed the sales tax deduction. House Majority Leader Tom DeLay has proposed legislation restoring the deduction.

Issaquah Mayor Ava Frisinger and Seattle City Councilmember Judy Nicastro joined Patterson and Sullivan in calling for the restoration of the deduction.

Metropolitan King County release, July 31

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