Out of state tax

Some out-of-state residents and Canadians will no longer be eligible for a sales tax exemption at Washington businesses, thanks to a new law that took effect in July. Pictured here is Easton's Books, a long-standing business in downtown Mount Vernon.

Some out-of-state residents and Canadians will no longer be eligible for sales tax exemptions at Washington retailers, thanks to a new law that took effect in July.

Businesses must now collect sales tax on purchases made by residents from Oregon, Alaska, Colorado, Delaware, Montana and New Hampshire, and Alberta, Northwest Territories, Nunavut, Yukon in Canada.

Previously, residents from those places could request exemptions from state businesses at the point of sale. Under the new law, this option is no longer available.

Instead, nonresidents may request a refund directly from the state Department of Revenue for the state portion of the tax, limited to purchases of goods over $25 once a year, according to DOR.

There will be no changes to sales tax exemptions for nonresidents who purchase vehicles, vessels, watercraft and farm machinery for farming activities from state businesses.

In downtown Mount Vernon, PAVÉ Jewelry & Design owner Janey Dodge said she estimated the change would have little impact on her sales, since most of her customers reside in state.

“I don’t foresee it being a problem,” she said.

Lyons Furniture Sales Manager Steve Schons said he has a few Alaskan customers, but none have asked for exemptions.

He said with less paperwork to keep track of from those who request exemptions, it will make it easier to do business.

“I’m actually pleased about it,” he said. “I don’t have to account for it.”

Benjamin Oliver, assistant manager at Tractor Supply, said he predicted the change would primarily affect businesses on the state’s southern border that draw a lot of Oregon customers.

At Pelican Bay Books & Coffeehouse in Anacortes, co-owner Eli Barrett said some Oregon customers would ask for the exemption, and most who did were making small purchases.

“They were pulling out IDs and filling out paperwork to save 27 cents,” he said.

Now, the responsibility will be on the customer to request an exemption from the state if they want it, he said.

Ellen Gamson, executive director at the Downtown Mount Vernon Association, said one impact is that business owners have a duty to collect that sales tax from nonresidents previously eligible for the exemption and report it to the state.

The change is expected to raise $54 million in state revenue over two years, according to The Associated Press.

— Reporter Jacqueline Allison: jallison@skagitpublishing.com, 360-416-2145, Twitter: @Jacqueline_SVH

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