A proposal to repeal the retail sales-tax break Oregon shoppers get in Washington advanced Wednesday through the Washington House of Representatives, but not before the bill was tweaked to give Oregon shoppers a rebate option for the sales tax they would pay. The bill now heads to the Senate.
Diminishing the longtime sales tax exemption for Oregonians is part of a larger plan by Democrats in the House to raise money for education. Their plan includes ending certain tax breaks and making some temporary taxes permanent. Washington lawmakers are under a court order to spend more on the state’s K-12 education system, and they’re also facing a roughly $1.2 billion budget shortfall.
State Rep. Sharon Wylie, D-Vancouver, successfully offered the rebate amendment to the proposal. That amendment would still require Oregonians to pay the retail sales tax at the time of their purchase, but they could later apply to get the state and local portions of the sales tax back, if the amount they want back is at least $25.
The shopper would have to provide a receipt for purchases and proof of residence in Oregon.
“Twenty percent of some of the retail business (in Southwest Washington) comes from out-of-state shoppers,” Wylie said in a statement. “My amendment will allow these retail businesses to continue offering the sales-tax exemption to out-of-state shoppers, but it preserves a lot of the revenue the state needs to fulfill the promises we made to our constituents back home, which deserve to be kept.”
Vancouver niche businesses — such as furniture shops and art galleries — get a significant portion of their business from Oregon shoppers, Kelly Parker, president of the Greater Vancouver Chamber of Commerce, has said. Those Oregon shoppers could be turned off by having to pay a more than 8 percent sales tax on their purchases in Washington, even if there is a process in place to get some of that money back, Parker said.
State Reps. Monica Stonier, D-Vancouver; Paul Harris, R-Vancouver; Brandon Vick, R-Vancouver; and Liz Pike, R-Camas, voted against the bill to raise state revenue. Wylie and Rep. Jim Moeller, D-Vancouver, voted for it.
“This bill unfairly targets the people of Clark County and the surrounding communities,” Vick said in a statement. “If the business that comes from this tax exemption goes away, the quality of life of our families and communities is going to be dramatically impacted.”
Repealing Washington state’s retail sales-tax exemption would not impact the tax break Oregonians receive when buying a vehicle in Washington.