WASHINGTON, DC – Today, the U.S. Senate moved to bring tax relief to American families and businesses by passing legislation by a vote of 93 to 2 that extends numerous expiring family and business tax cuts. U.S. Senator Maria Cantwell (D-WA) led negotiations with Democratic and Republican leadership to include extension of clean energy tax incentives and state sales tax deductibility. Also included in the package were provisions to lower energy bills for homeowners who make energy efficient improvements to their homes; support for rural counties through the Secure Rural Schools program; an update to the alternative minimum tax (AMT); and, support for research and development at U.S. businesses.

"This package means real money for American families and businesses," said Cantwell. "At a time when our economy is lagging, this legislation will help create jobs, support working families and businesses, and help reduce our dependence on foreign oil. For Washingtonians, passage of this bill means more money in the pockets of taxpayers, investment in research and development, funds to support rural counties, creation of good-paying, high-skilled jobs, and savings for Washington families who make energy efficient improvements to their homes. I am proud to have worked with my colleagues on both sides of the aisle to craft a package that means we’ll be putting money back in the pockets of hard-working families, and providing the support our economy needs."

Specifically, this package includes:

Two-Year Extension of the State Sales Tax Deduction – Certainty for 2008 and 2009

· An average of $600 more in the pockets of Washington state taxpayers.

· In 2006, more than 880,000 Washingtonians claimed this deduction.

· Forty-nine percent of those taxpayers made less than $75,000. These are the same families that are struggling to make ends meet with stagnant or shrinking incomes.

Reauthorizes the Secure Rural Schools Program for Four Years, Fulfilling The Promise We Made to Support Rural Counties; Fully Funds the Payments In Lieu of Taxes Program

• Some rural counties have a very small tax base because Federal lands take up so much of the county.
• These critical funds, approximately $47 million each year for 4 years, help pay for part time county employees and teachers, road maintenance, general government services, resource conservation projects, forest service land rescue services, and programs to support economic development.
• This bill provides the funds that fulfill a 100 year old deal between the federal government and the rural counties that host our National Forests.
• Payment in Lieu of Taxes (PILT), which has never been fully funded until now, provides an influx of flexible dollars to counties to make up for the lose of a tax base by the presence of federal land. Washington state will receive approximately $11 million for Fiscal Year 2009, as opposed to the $6.3 million received in Fiscal Year 2007.

Contains An Historic Energy Tax Package That Will Bring New Jobs to Washington State

• For the first time Congress voted to take embedded subsidies away from the mature and wildly profitable oil and gas industry and reorient those dollars to accelerate America’s transition to a cleaner and more renewable energy system.
• The bill extends the production credit for electricity produced from renewables, like wind, biomass and incremental hydropower. For the first time these production tax credits are extended to wave, tidal, and hydrokinectic technologies which have particular promise in the Pacific Northwest.
• Extends the investment tax credit for solar for eight years, providing the solar industry the market certainty they need to create 440,000 jobs nationally by 2016. In Washington state that translates to more than 10,000 permanent green collar jobs and up to 15,000 construction jobs.
• Extends and expands the Clean Renewable Energy Bonds
• (CREBs) program that enables public power and consumer-owned utilities that cannot benefit from federal tax credits reduce their renewable energy investment costs.
• In Washington State, 1,000 Megawatts of installed wind capacity is estimated to create 2,650 new local jobs during construction, an additional 400 new local long-term jobs during the operational years of the wind farms, and a total economic benefit of $1.1 billion over the lifetime of the wind projects.

Helps Americans Save Money By Lowering Their Energy Bills

• Helps homeowners generate their own electricity and hot water by providing a 30 percent tax credit towards the installation of solar electric or hot water systems, and expands the credit to cover residential wind generators and geothermal heat pumps. Homeowners installing these technologies can reduce a household’s water heating costs by 50 percent and save Americans $350 a year in energy costs.
• Consumers can also save up to $500 on their taxes if they install energy efficient products in their homes which can translate to big energy savings. For example, installing energy efficient windows that can save an average homeowner $125 to $450 each year and high efficiency heating and cooling equipment can save up to $170 per year, knocking off nearly 10 percent off an average homeowner’s annual energy bill.
• Provides new car buyers up to $7,500 to buy plug-in electric cars, trucks or SUVs – vehicles that will start appearing in showroom in 2010 and will likely achieve over 100 miles per gallon. According to a study by the Pacific Northwest National Laboratory, our current electricity infrastructure could support an estimated 70 percent of America’s passenger vehicle fleet, which would displace 6.5 million barrels of oil each day, an amount equivalent to 50 percent of our oil imports, and cut greenhouse gases by an estimated 20 percent. And in Washington state, the cost of powering plug-in vehicles would be the equivalent of 70 cents per gallon. This provision is derived from a bipartisan bill authored by Senators Cantwell, Hatch, and Obama last year.
• For the first time, energy-efficient biomass fuel stoves, including wood pellets stoves, are eligible for a consumer tax credit of $300. These stoves can provide an alternative way for homeowners to use renewable resources to heat their homes. Sixty percent of wood pellet stoves on the market are manufactured in Washington state.

Extension of the R&D Tax Credit for 2008 and 2009

• This tax credit has a strong history of supporting high-wage jobs in Washington state, from big companies like Microsoft and Boeing to small companies throughout the state.
• In Washington state, research and development makes up 4 percent of the states’ economy (this is R&D activity as a percent of the gross state product (GSP)). If our state economy is going to continue to grow we must make sure we don’t lose any more of this needed investment.
• Nationwide, the Information Technology Association of America estimated that if the tax credit was in place during 2008, there would have been $8.5 billion more in economic activity this year.

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