Non-resident sales tax exemption important to Washington

Apr 3, 2019
Written by Mark Johnson, Senior Vice President of Policy and Government Affairs

The House Democrats have proposed converting the non-resident sales tax exemption into a yearly remittance program in an attempt to raise more revenue or taxes.  Unfortunately, this proposal will fail and actually cause businesses to close and jobs to be lost.

Shoppers from states, provinces and U.S. protectorates with no sales tax or a sales tax rate of 3 percent or lower are currently able to produce ID and make purchases in Washington State sales tax-free.  Why is this important?

Washington State has a sales tax rate of 6.5 percent and a local option that pushes that rate in some locations to 10 percent, for instance, in Seattle. The State of Oregon has no sales tax.  Alaska and Montana also qualify for sales tax-free shopping.  Shoppers from these states come to Washington to make purchases, especially along the Washington/Oregon border.

Why would an out-of-state shopper buy something in Washington if they had to keep their receipt and apply for a partial refund a year later?  The answer is they wouldn’t.  They would simply buy that same item in their home state and skip the hassle.

The Department of Revenue predicts over $45 million in lost sales.  This will mean fewer jobs and some businesses will have to close their doors.  It will particularly hurt smaller businesses, some that depend on as much as 60 percent of their sales coming from out-of-state shoppers.

Washington Retail urges legislators to vote no on House Bill 2157 to convert the non-resident sales tax exemption into a yearly remittance program.