Washington should look at out-of-state tax options

It could be a better option to boost revenue than raising the statewide sales tax.


Gov. Chris Gregoire and the Democrat-controlled Legislature are going to impose new taxes to balance the budget. Exactly what taxes are going up isn't certain. Several options are being considered.

The most onerous on the menu of proposed new or higher taxes is an increase to the statewide sales tax.

This increase is being sold as temporary - until 2013 - but there is no iron-clad guarantee it will go away in three years - or ever. Once a tax is in place, and government becomes dependent on the revenue, it rarely goes away.

We also have concerns about other new, um, revenue enhancements including "closing of a loophole" that allows those who trade in a older vehicle when buying a newer vehicle to have the value of the trade-in deducted before the sales tax is computed. So if someone in Walla Walla were to trade in a vehicle worth $5,000 the sales tax savings would be $415. The loss of this exemption, which was voted in by the people, is a pinch on consumers and car dealers.

If the Legislature must raise taxes, take it easy (or, at least easier) on Washingtonians.

Perhaps it is time to look at eliminating or reducing exemptions for out-of-state purchases.

Let's think about taking aggressive steps to collect Washington state sales tax on Internet purchases made by Washingtonians. Allowing out-of-state (or out-of-country) merchants to sell products without tax gives them a competitive advantage.

Cracking down on Internet sales would bring in direct tax revenue. In addition, brick-and-mortar merchants who pay taxes could see an increase in business.

The state should also think about closing the loophole that allows Oregon residents to make sales-tax-free purchases in Washington. We understand this won't be greated with joy by Oregonians, particularly by Milton-Freewater residents who do a lot of shopping in Walla Walla.

Still, it is fair. When Washington residents work in Oregon they must pay income tax.

We understand that local merchants would be concerned about losing the business from Umatilla County.

And those in the Vancouver, Wash., area across the river from Portland would have even more angst.

Realistically, however, those living in Milton-Freewater are still going to shop at Macy's or Wal-Mart for everyday items even if they have to pay sales tax. On big purchases, say those over $1,000, that's a different story. Perhaps the sales-tax exemption could remain on those purchases as a way to protect in-state merchants.

This out-of-state taxation would generate revenue for Washington without adding a bigger tax burden to residents who are going to see the costs of some goods - perhaps candy, bottled water and, unfortunately, even cars - go up.

We see these curbing the out-of-state exemption and collecting Internet tax as better alternatives than raising the sales tax.


Use the comment form below to begin a discussion about this content.

Sign in to comment

Click here to sign in