Senators push to make sales-tax deduction permanent

WASHINGTON -- Senators from Nevada and Washington are pushing for room in the federal budget to make permanent a popular deduction for state and local sales taxes.

A law that allows tax filers to write off a portion of those taxes from their income has been only temporary, and must be renewed from time to time by Congress. The current law expires at the end of this year.

Sen. Harry Reid, D-Nev., this week introduced an amendment that would make it easier for Congress to make the tax break permanent.

Reid said Tuesday he intends to place the amendment onto the 2010 budget bill the Senate is debating.

The amendment by itself would not extend the tax break. Rather it would create a "placeholder" in the budget for whatever follow-up bill Congress considers.

"We're going to try to get it done in the budget so that we can get it done every year without having to have special legislation," Reid said.

The amendment is co-sponsored by Sen. John Ensign, R-Nev., and by Sens. Maria Cantwell and Patty Murray, both D-Wash.

With residents counting every dollar during a recession, "Nevadans simply cannot afford for this tax deduction to expire," Ensign said.

When taxpayers fill out their income tax forms they are given the choice to deduct their state income taxes, or their sales taxes. The sales tax break is geared to residents of eight states that do not have state income taxes.

More than 440,000 Nevadans claimed the sales tax deduction in 2006, the most recent year for which the Internal Revenue Service had figures available.

Washington, Alaska, Florida, South Dakota, Tennessee, Texas and Wyoming are the other states that do not have income taxes.

Contact Stephens Washington Bureau Chief Steve Tetreault at stetreault@stephensmedia.com or 202-783-1760.