(KPTV) - If you live in Oregon and you shop in Washington, you could see big changes coming to how the state handles sales tax exemptions.
As it currently stands, Oregonians can show their drivers license and fill out a form at the point-of-sale to avoid paying the Washington sales tax.
But under Senate Bill 5997, which passed in both the Washington Senate and House, that system would go away.
If signed by Governor Jay Inslee, starting in July, shoppers would be allowed a single reimbursement per year.
That means you would have to save all of your shopping receipts over the course of the year, fill out a form with the Washington State Department of Revenue and mail it off to get a refund back for the sales tax you paid on your purchases.
Lawmakers are banking on the fact that most people won’t take the time to do it, or may submit some but not all of their receipts for reimbursement.
Legislators expect the bill to generate 54 million dollars in state revenue over the next two years, according to Aaron Wasser, the Communications Director for the Washington Senate Democrats.
Senator Christine Rolfes (D-Kitsap County), the Operating Budget Chair, is among the supporters of SB 5997.
“We want people who come to Washington to continue to shop here because of our great retailers and competitive prices. We set up exemptions and a remittance program especially for Oregonians who regularly cross the border to do business,” Sen. Rolfes told FOX 12. “One reason for the change is to capture the revenue from folks who use out-of-date residence information to avoid paying the sales tax. Revenue goes toward our shared priorities – things like education, health care and the environment. All Washingtonians that benefit from these things should help pay for them.”
Senator Lynda Wilson (R-Vancouver) is among the lawmakers who voted no.
“It feels like Clark County and the other counties along the Columbia River were simply run over by legislators from the Puget Sound area who don’t understand how business happens in border cities,” Sen. Wilson told FOX 12. “They ignored research that indicates half of the people who shop in our border cities are from outside Washington, and the fact that this exemption had a favorable review by the independent citizens’ commission that look at tax policy. The only silver lining about this new law is that the discussion about it led to the passage of my bill to reduce vehicle-license fraud (SB-5362).”
The President and CEO of the Greater Vancouver Chamber of Commerce, John McDonagh, is also concerned about the potential negative impacts on local businesses.
“We have merchants who tell us that 15-25% of their annual gross sales are to shoppers from out-of-state. Primarily in our market, that would be Oregon. So an 8.5% difference at the time of sale could affect whether or not the shoppers from Oregon continue to do business with our merchants,” McDonagh said.
GVCC works with more than 1,000 businesses all across Clark County.
McDonagh said many business owners are just hearing about this legislation now – after it has already been passed and is awaiting the Governor’s signature.
“In the past when this kind of proposal has been brought up, it was introduced early in the session,” he added. “This time it came out with the budget, which is past the time for most bills to be introduced and it was tucked into a very long budget document.”
“I’m not really sure about the impact at this point,” Christina Howsley said, who works at a clothing boutique in downtown Vancouver called The Difference.
The store originally opened in Lake Oswego nearly 40 years ago and opened its second location only a few months ago.
“We bring some of our clients from Lake Oswego and I’m wondering if that won’t hinder them coming to our store,” she added.
To learn more or read the full text of the bill, visit: legiscan.com/WA/text/SB5997/2019.
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