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WA Bill to Repeal Nonresident Sales Tax Exemptions


UPDATE 4/11/2012 - HB 2791 passes House Ways and Means Committee.

UPDATE 3/13/2012 - HB 2791 failed to pass the house by a 57-41 vote. The bill would have required a two-thirds vote to pass.

The Oregonian Live reports that the Washington House Ways and Means Comittee has passed HB 2791, a proposal to repeal the Washington sales tax exemption for out-of-state shoppers.

Washington HB 2721 has two components:

  1. It repeals RCW 82.08.0273, which grants a sales tax exemption to out-of-state consumers who reside in states that do not impose a sales tax.
  2. It adds a new section to RCW 82.32, stating that the funds gained by repealing RCW 82.08.0273 must be transferred into an account for all-day public kindergarten.

The bill gives the following justification for this repeal: "The legislature finds that during difficult fiscal times it must prioritize scarce resources so as to provide the best outcomes for the citizenry of our state." It goes on to invoke the Washington Supreme Court decision in McCleary v. State, where the court asserts that Washington has failed to meet its mandate to fully fund the public school system.

The bill's opponents argue that it will harm Washington businesses by discouraging Oregon residents from making purchases in Washington state, and will fail to completely fund the all-day kindergarten classes. Supporters of the bill urge that the revenue is an important and necessary step towards reaching the supreme court mandate.

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Avalara Author
Will Frei
Avalara Author Will Frei
Will Frei covers sales tax news including best practices, legislation and sales tax technology. He is the Social Media Manager at Avalara.