03/15/2011: "Governor Signs Bill To Maintain Sales Tax"

Olympia - Governor Chris Gregoire signed legislation today that would continue the collection of a sales tax from Canadians shopping in Washington State.

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.

With the signing of Senate Bill 5763, this exemption will come to an end.

“This bill ensures fairness for residents across the state, requiring those who utilize public services to also invest in the communities that they frequent,” Said Senator Kevin Ranker, D-San Juan Island, the bill’s prime sponsor.

A similar proposal, House Bill 1936, was sponsored by Representatives Kristine Lytton, D-Anacortes, and Jeff Morris, D-Mount Vernon.

“This is the way Washington has done business for many years,” said Morris, whose ties with BC Ferries helped resurrect the run between Anacortes and Sidney, helping keep the commercial and tourist ports open. “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 them. When we cross into BC, 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.”

“This is critical funding for both our state and our local governments, which see thousands of Canadian shoppers cross the border and spend the day in Northwest Washington,” added Lytton. “We love to host them, but we cannot afford to pay for the local infrastructure and capacity needs on our own.”

Said Ranker, “Lawmakers will be faced with many tough choices this session -but this isn’t one of them. For border counties, this legislation represents hundreds of thousands in foregone revenue invested back into the community and back into critical public services.”

The legislation will take effect July 1, 2011.