OLYMPIA -- Bottled water would carry the standard sales tax and out-of-state shoppers would have to apply for a refund of taxes they pay at the register under a proposal approved this morning by the House Finance Committee.

On an 8-5 party-line vote, the panel voted to close four tax exemptions and dedicate the estimated $100 million it would raise next year to a cost-of-living raise for teachers and school supplies. 

Also among the tax preferences the committee voted to close is an exemption on fuel that oil refineries use to operate their facilities and a preferential rate on the business and occupation tax that drug resellers have.

"We have a tax code that is Swiss cheese," said Rep. Chris Reykdal, D-Tumwater, who voted for the bill while acknowledging "this won't fix that bigger problem." 

But Rep. Ed Orcutt, R-Kalama, said charging out-of-state shoppers Washington sales tax will hurt retailers in cities that border Oregon and Idaho. Even though they can apply for a refund, they'll see the tax at the check out register, they'll say "I'm not fillin' out no form", leave their goods on the counter and never come back.

Rep. J.T. Wilcox, R-Yelm, said voters rejected putting the sales tax on bottled water, and the other proposals have been studied and rejected. "This is a tired, worn-out set of proposals."

The bill now moves to the House, where it is separate from majority Democrats supplemental budget but could be added later. The Senate budget has no similar set of tax changes. 

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