The Capitol Record

Proposal would eliminate sales tax exemption for out-of-state visitors

Lawmakers are considering legislation that would make out-of-state visitors pay retail sales tax when buying goods in Washington.

The law would impact visitors from states without a sales tax, including Oregon, Alaska and Montana.

House Bill 1890, sponsored by Rep. Chris Reykdal (D-Tumwater), would also divert the revenue gained into a tax refund for working families. Repealing the tax exemption would raise about $30 million a year.

A similar bill introduced last year that would have used the extra revenue to fund all-day kindergarten failed to receive a two-thirds majority vote needed to pass in the House.

Under the proposal, individuals and families who currently qualify for the earned income tax credit would receive an additional $50 to $200 refund, Reykdal said.

Opponents of the legislation say it would unfairly penalize businesses in border towns that compete with neighboring states for customers.

“This will cost Washington state jobs, particularly along the border counties that are most impacted by this,” said Mark Johnson with the Washington Retail Association.

Supporters say taxing out-of-state visitors would put more money into the pockets of Washingtonians.

“Even in a sales tax heavy state, you can make the system more fair by asking those, primarily in Oregon, to pay our sales tax and put that money right back into the hands of working families all over our state,” said Reykdal.

The committee did not action on the bill.

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