March 10, 2011 in City

Bill would end tax break for Canadians

Exemption hurts towns near border

OLYMPIA – The House approved a Senate bill to clarify a current retail sales tax exemption, making sure that Canadian visitors pay sales tax when they visit Washington state.

The measure is sponsored by Sen. Kevin Ranker, a San Juan Islands Democrat, and aims to maintain revenue for retailers in Bellingham and other border communities, where up to 10 percent of sales tax collected comes from Canadian visitors.

Currently, Washington gives exemptions to visitors from states or provinces with no comparable retail sales tax. But last year, British Columbia adopted a new tax to replace its provincial sales taxes, following the lead of other provinces.

The Department of Revenue had ruled that the new tax met existing exemptions. But cities like Bellingham disagreed.

Ranker’s bill changes the law to overrule the Department of Revenue. The bill says that if a province has a sales tax, value-added tax or similar tax of 3 percent or more, the exemption does not apply.

The bill now heads to the governor.

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