By John Gramlich Stateline Staff Writer
TODAYS TAKE
The budget debate on Capitol Hill this week is primarily about the payroll tax but residents of seven states without an individual income tax Florida Nevada South Dakota Tennessee Texas Washington and Wyoming have an extra incentive to see how it turns out.
For years residents of those states have been able to deduct state sales taxes from their federal returns in place of the state income tax deductions that residents elsewhere enjoy (Alaska and New Hampshire have neither sales nor income taxes). But as
The Seattle Times reports its not clear yet whether the sales tax deduction will be part of any budget deal that emerges from Congress.
The latest deal on a payroll-tax holiday hammered out this week by a House-Senate conference committee apparently does not include an agreement to extend sales-tax deductions and a host of other tax breaks" the paper reports. That leaves unsettled whether ... Washington residents will be able to write off taxes on purchases made this year."
This isnt the first time that Congress has left the deduction in limbo. The credit has lurched from one temporary renewal to another"
The Times notes with lawmakers letting it expire in 2009 only to retroactively renew it a year later through 2011.
The 2011 tax returns in other words still allow the sales-tax deduction. What remains to be seen is whether returns for 2012 to be filed early next year will allow it. In the meantime some residents of Washington State are unhappy with the uncertainty. Its so confusing" one Seattle resident tells
The Times. Its no way to run a government.
Todays Take" provides a quick analysis of the days top news in state government.
