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House passes bill to maintain sales tax for Canadian visitors
The House of Representatives approved legislation March 9 that would continue the collection of a sales tax from Canadians shopping in Washington.
Senator Kevin Ranker, D-San Juan Island, sponsored Senate Bill 5763 to ensure fairness for Whatcom County residents. The bill now heads to the Governor’s Office for executive approval.
Last summer British Columbia changed its sales tax to effectively combine Canada’s federal goods and services tax and B.C.’s regional provincial sales tax into a single value-added tax on purchases. The change made Canadian shoppers of certain states and provinces without sales tax eligible for a sales-tax exemption. As much as 10 percent of the sales tax collected in Bellingham is from Canadian residents. Significant amounts of revenue would be lost as a result.
“This is the way Washington has done business for many years," said Rep. Jeff Morris, D-Mount Vernon. "When nonresidents visit our state and are able to avoid paying our sales tax, it means they’re using our services but not paying for the. When we cross into B.C., we must pay their tax upwards of 12 percent on every purchase. Even with this disqualification, Canadian visitors are receiving a deal by shopping in our state.”
Bellingham and Whatcom County sued the state Department of Revenue, and a Skagit County judge issued a restraining order on the exemption.
“Lawmakers will be faced with many tough choices this session – but this isn’t one of them,” Ranker said. “At a time when state and local governments are doing more with less than ever before, this choice is an easy one. This bill ensures fairness for Whatcom County residents and ensures that visitors contribute to the infrastructure and fabric of the communities that they frequent. For Whatcom County, passage could spell hundreds of thousands in foregone revenue invested back into the community and back into critical public services.”