May 20, 2019
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Nearly 40 lawmakers from both parties ask Gov. Inslee to veto sales tax increase aimed at border communities

Nearly 40 state lawmakers from across the state and both political parties sent a letter to Gov. Jay Inslee this morning respectfully asking him to veto a sales tax provision that would hurt businesses that cater to out-of-state shoppers.

The provision of Senate Bill 5997 ends Washington's longtime exemption on sales tax for out-of-state customers -- a provision that evens the playing field for those coming into Washington from states without a sales tax. The bill changes the exemption into a remittance program, giving shoppers one opportunity a year to request that their sales tax be sent back to them.

"We believe that the conversion of the non-resident sales tax exemption to a remittance program... will cost significant amounts of business for retailers near the Oregon and Idaho borders," 38 lawmakers wrote to Inslee. "We believe retailers will see significant drops in customers -- especially along the Oregon border where retailers report 30-40% of their customers are Oregon residents."

Lawmakers expect the state to collect $53 million more over the next two years from the change, betting that many Oregon residents won't bother to follow through on the necessary annual paperwork. However, some observers say that number is high.

“The estimate that the supporters (of this legislation) made on how much revenue is going to be generated by the state is way overblown,” said Rep. Larry Hoff, R-Vancouver. “Oregonians are simply just going to stop coming to Washington. Why would they come to Washington and pay the tax, and then subscribe to this strange remittance program that they can only apply for once a year?”

It's a bipartisan concern in border communities.

Sen. Annette Cleveland, D-Vancouver, said many of the retailers in her community depend on shoppers from Oregon -- some of them for more than 50% of their customer base.

"I strongly advocated over the past seven years for the sales tax exemption to remain, as it helps create some equity and fairness for communities and businesses such as ours, bordering a state with no sales tax," Cleveland said. "I am also concerned that the assumption of new revenue to our state through elimination of this exemption is faulty, as I believe instead, Oregon shoppers will choose to stay home to shop."

AWB Government Affairs Director Clay Hill is quoted in the Tri-City Herald saying the bill is "especially disheartening" because there was unified opposition by business and retail organizations.

Inslee is scheduled to act on this bill on Tuesday. Employers and chambers of commerce with concerns on this bill are urged to contact Gov. Inslee and ask him to veto the repeal of the out-of-state sales tax exemption.

To learn more, contact AWB's tax and fiscal policy expert, Clay Hill.

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Housing Forum
Moving Backward

Gov. Inslee is wrong to flip-flop on liquefied natural-gas facility in Tacoma

By The Seatte Times Editorial Board

Gov. Jay Inslee is doing an outstanding job staying on message in his presidential campaign, making climate change his signature issue and a focus of the primaries.

But Inslee went too far last week when he pulled support for a project in Tacoma that will cut emissions and create jobs.

Early in his governorship, Inslee championed the Tacoma liquefied natural-gas (LNG) facility. That pragmatic, nuanced approach provided certainty for local companies to commit more than $500 million to a project that will substantially reduce emissions from ships sailing between Puget Sound and Alaska.

That stance no longer jibes with the current mantra of his far-left environmental base, which now advocates for halting additional fossil-fuel consumption. It also had put Inslee in conflict with one of the state's wealthiest tribes, the Puyallup Tribe of Indians, which opposed the project.

Moving goal posts late in the game may discourage companies from innovating and investing in cleaner ways of doing business, at least in Washington....

Read the full editorial in The Seattle Times
A New Challenge for Border Towns

Lawmakers changed the sales tax exemption. Will Oregon residents still want to shop Tri-Cities?

By The Tri-City Herald Editorial Board

Of all the new, last-minute tax measures approved by the Legislature two weeks ago, one in particular likely will cause headaches for Mid-Columbia retailers in coming months.

Oregon residents will no longer get a sales tax exemption right away at a Tri-Cities checkout counter.

Thanks to ESSB 5997, out-of-state shoppers will have to pay the sales tax upfront, save their receipts and file for a one-time, yearly reimbursement from the state of Washington.

They will qualify only if the amount they are requesting exceeds $25.

Clay Hill, government affairs director for the Association of Washington Business, said approval of ESSB 5997 was "especially disheartening" because there was a unified voice of opposition by business and retail organizations.

Democratic lawmakers are betting they will raise $53 million for a two-year budget from out-of-state shoppers who don't turn in their paperwork or who don't meet the $25 minimum threshold.

But it is the border communities that will pay the biggest price for the tax grab, and it isn't right to put the burden primarily on the edges of the state.

Read the full editorial in The Tri-City Herald
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