Even if the Washington State budget wasn’t busted, it is unfair and bad policy to allow Oregon residents an exemption from sales taxes in Washington. Oregon does not allow Washington residents an exemption from their income tax. It is also unlikely that very many Oregon residents actually travel to Washington to purchase merchandise given that their state is sales tax free.
Another thing that makes the exemption outrageously unfair is that it gives all the Washingtonians who illegally maintain Oregon driver’s licenses and tags a way to starve their state of revenue.
This is not a Washington State problem. This is an Oregon State problem. Oregon should have a sales tax. Washington State should not be deprived of revenue because of the misguided tax policy of a neighboring state. Also it seems likely tolling will be instituted on the Columbia river bridges. This will ameliorate the effect of the repeal of the exemption on Washington retailers that are close to the border.
So I commend Representative Wallace for reintroducing a bill to eliminate the sales tax exemption for out of state residents. Let’s hope it passes quickly.
Now if we could just get rid of the B&O tax in this state and replace it with a reasonable income tax we would be well on the road to a sensible state taxation system. The B&O tax applies to gross revenues of businesses. As such it creates a big incentive for businesses that gross a lot of revenue but make little or no profit to not locate themselves in Washington State. There is not necessarily a relationship between a business’s gross revenue and its ability to pay a tax. Many start up business have net losses and this tax makes it even harder for these businesses to survive and eventually prosper. Why would a state want to have a tax policy which gives a huge disincentive for businesses to start up or relocate here? Absent a repeal, businesses should at least be able to separately state this tax on their invoices and receipts.
The sales-tax exemption was never intended to enrich Oregonians. Washington retailers pushed the exemption through in 1965 to boost their sales. And it’s worked wonders for four decades.
Wallace’s bill will keep the exemption in place when Oregonians (and scofflaw Washingtonians) buy autos, trucks, boats and aircraft.
So, eliminating the exemption will slash sales for small stores and shops to pick up small change in added revenue. But car, truck and boat dealers enjoy business as usual — happily starving their state of millions in revenue.
As for tolls — that’s at lease a decade away. Bring this back when the new bridge opens.
“This is not a Washington State problem.”
Guffaw! Oregonians could care less either way. Washington State needs an income tax, but don’t hold your breath for Wallace to propose that.
It gives all the Washingtonians who illegally maintain Oregon driver’s licenses/tags a way to starve their state of revenue.
Here’s your major breach in the lost sales-tax floodgate. Plugging an exemption isn’t going to force these Washingtonians to quietly pay their sales tax. They’re breaking the law now to save a few bucks!
No, they’ll cross to Oregon to do all their shopping. And Oregon retailers will hold a luncheon to honor Wallace for doubling their sales.
People are not going to bother to cross the border on small ticket items. The Vancouver retailers do just fine even though every customer they have including Washingtonians could avoid paying sales tax by traveling ten minutes or so down the road.
I was a retailer for 11 years. Most buyers pay no attention to the tax at all on smaller items.
With regard to big ticket items, Washington just needs to figure out how to stop Washington residents from pretending they are Oregon residents and that problem is solved.