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The reason we cannot go is [because/that] our car needs new tires.

Which word to choose?

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They both work equally well, but I am not a fan of the is because ... construction. It's very awkward. In most cases, you don't need both is and because in the same clause. So formally, it's is that or just because. The words the reason are just filler words. Informally, there's no difference.

The reason we cannot go is that our car needs new tires.
We cannot go because our car needs new tires.

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