Oregon shoppers who enjoy shopping tax-free in Vancouver might want to make a trip across the river before the January legislative session begins.
A familiar effort is underway in Olympia: restricting the ability of out-of-state residents to buy tax-free items.
Democratic Gov. Jay Inslee is making a push to alter the sales tax exemption for nonresidents as part of a broader package to increase teachers’ starting salaries. The minimum state base pay for a teacher is $35,069 for the 2015-16 school year.
Inslee heard from the Southwest Washington legislators who feel it’s unfair to border counties.
But the governor told The Columbian on Friday, “It’s fair to students of the state of Washington that need an education.”
The proposal would require out-of-state residents and businesses shopping in Washington to apply for a sales tax exemption if they made a purchase of $25 or more. Purchases of less than $25 would not qualify for an exemption.
Oregon residents are accustomed to receiving a sales tax waiver simply by showing their identification at the cash register.
“We did take into consideration our business climate in the border counties,” Inslee said. “And that’s why we proposed a rebate program for larger purchases, so out-of-state Oregon residents that want to buy a refrigerator in Vancouver can get a rebate.”
Inslee said he hopes the rebate will lessen the criticism.
“We think that should hopefully reduce some of the concerns, but one way or the other we have to finance our schools and if other people have their ways to do it, we’ll be open to those ideas, but these appear the most reasonable,” the governor said.
Restricting the sales tax exemption is expected to bring in $55.4 million in revenue in the next two-year budget cycle.
Several business leaders have long opposed the measure, saying it would hurt Clark County.
“If you want people to do their Christmas shopping in Vancouver, you have to have an incentive to make it look similar to their shopping experience in their own community,” said Sen. Don Benton, R-Vancouver. “Otherwise, they won’t come here. We’ve had business (owners) testify in the past that it would devastate their business.”
Support for idea
There is one Southwest Washington legislator, however, who wholeheartedly embraces the idea: Rep. Jim Moeller, D-Vancouver.
“Sorry, out-of-state residents,” said Moeller.
Inslee, a first-term governor who is expected to run for re-election in 2016, unveiled his budget proposal earlier this week in preparation for the upcoming legislative session. In a wide-ranging interview with The Columbian on Friday, he spoke of the need to dedicate more money to the state’s mental hospitals and help communities that were devastated by wildfires during the summer. He also said the task force he convened to tackle the inequity in the state’s budget school system and satisfy the McCleary court case requirements is close to striking a deal.
Both the House and Senate will propose their own supplemental budgets when the legislative session begins in January.
