Sales Tax Deductibility

Because of Congressman Baird's leadership, for the first time in almost two decades Washington state taxpayers can now deduct state sales tax from their federal income tax returns. This deduction saves Washington state families more than $475 million every year on their federal income tax returns and results in more than $570 million in additional economic activity in Washington.

To pass this law, Congressman Baird worked tirelessly to build a strong bipartisan coalition of lawmakers from seven states that, like Washington, have state sales taxes but no state income tax. Together with his Republican cosponsor, Kevin Brady from Texas, and with leadership in the Senate from Washington Senator Maria Cantwell, Congressman Baird succeeded in changing the law and making sales tax deductibility a reality. A fellow member of Congress declared Congressman Baird the "father of sales tax deductibility."

Having achieved this first, short-term goal, Congressman Baird is now working to make the deduction permanent and has introduced the Permanent Sales Tax Deduction Act.

Capital for Small Businesses

Access to affordable financing and capital is one of the chief obstacles preventing small business growth. Congressman Baird has championed the Business Retained Income During Growth and Expansion (BRIDGE) Act. The BRIDGE Act allows fast-growing small and mid-sized businesses to defer a portion of their federal income tax liability for two years in order to invest the money in the growth of their businesses. When implemented, this proposal is expected to create over 900,000 new jobs in three years. It will also generate new revenue for the federal government when the deferred taxes are gradually paid back with interest by the businesses.

Start Up Success Accounts

Small businesses can be a vehicle to make dreams a reality, but they can also be a nightmare of tax burdens and paperwork. To help small businesses start off well and continue to grow, Congressman Baird introduced the Start Up Success Accounts (SUSA) Act. Structured to help small businesses, SUSA accounts would allow business owners to defer taxes on some of their income for each of the first five years the business is open. This proactive program allows businesses to plan for and anticipate new expenses or potential downturns. Businesses can use the SUSA accounts as collateral for competitive loans to expand or draw from the account during difficult times, rather than go further into debt.

Cross-River Tax

More than 50,000 Southwest Washington residents currently pay Oregon income taxes. In recent years, Clark County residents have paid more than $140 million each year to Oregon State. The justification typically offered for imposing the Oregon income tax on Washington residents is that out-of-state residents entering Oregon to work exact a toll on the infrastructure of that state, and that such commuters should pay for services and facilities used while working on that side of the Columbia River.

Although Congressman Baird understands Oregon's concerns about addressing infrastructure needs, he does not believe Washington residents should have to bear an equivalent tax burden to Oregon residents, who benefit from many services that are unavailable to Washington residents. To address this inequity, Congressman Baird has introduced the Nonresident Income Tax Freedom Act, which would prohibit a state from imposing a tax on income earned by a nonresident.

Estate Tax Reform

Congressman Baird believes that the estate tax needs to be reformed. He has cosponsored legislation and voted to permanently reform the estate tax by immediately exempting up to $10 million dollars in assets from any tax at death. This reform will protect more than 99 percent of family-owned businesses, forests, and farms from paying any estate taxes. He believes this is a common sense compromise that would benefit local, family-owned businesses and farms.

Congressman Baird will continue to advocate for legislation to reform the estate tax and reduce the tax burden on family owned businesses and farms. He has also supported measures that allow family-owned businesses and farms to pass all their tangible business or farm assets on to family members tax free, as long as the business or farm stays in the family's hands. These fair and common sense changes will help local, family businesses stay local and family-owned and keep our communities stronger.

Loopholes and Offshore "Tax Havens"

When large corporations create bogus operations outside of the U.S. to avoid tax responsibilities they increase the burden on companies that remain loyal and obey the laws governing American businesses. So called corporate "inversions" typically involve the creation of a new foreign corporation in a country with low tax rates (a "tax haven") that then becomes the parent of the firm's foreign and U.S. corporations.

Congressman Baird believes that we should not continue to punish those companies that play by the rules. That is why he supports legislation aimed specifically at deterring past, present, and future corporate inversions. He has also voted to prevent companies that evade their domestic tax responsibilities from participating in U.S. government contracts.

	Internal Revenue Service
	Washington State Department of Revenue
	Joint Committee on Taxation
	Washington Tax Center (file and pay state taxes)
	Washington State Board of Tax Appeals