Oregon shoppers required to pay sales tax at register
Washington shoppers no longer will find themselves waiting in line at the register behind Oregon residents wanting to avoid state taxes.
Oregonians are no longer exempt from paying state taxes when they reach for their wallets under a law signed by Washington’s Gov. Jay Inslee that took effect July 1.
To recoup any sales tax expenses, Oregon residents now must file for a yearly refund from the state Department of Revenue for any state sales taxes paid in excess of $25 annually.
For decades, shoppers living over the state line to the south had avoided paying sales tax at checkout time at stores in the Mid-Columbia by providing proof of Oregon residency.
Sellers of big ticket items like appliances are concerned about the new law.
“We have been here a long, long time, and we have sold to Baker, La Grande, Hermiston, Pendleton all this time, and those people are going to have to drive all the way to Portland now to buy appliances,” said Tim Martin, sales manager for Bunch Finnigan Appliances in Kennewick. “It’s really bad. We wrote up our last two Oregon customers on (June 29). They’re not going to come here to pay the sales tax any more. They’re going to go to Portland. It’s going to be cheaper to have them pay the freight.”
The new law affects only the 6.5 percent state sales tax; no reimbursement of local taxes will be allowed at the point of sale or by reimbursement. Local taxes in both Benton and Franklin counties are 2.1 percent, which brings the total sales tax to 8.6 percent.
The removal of the sales tax exemption at the point of sale was included in the most recent biennial budget Washington lawmakers passed in the spring.
The Associated Press reports the change is estimated to bring in about $175 million to the state through mid-2025, with $53 million expected for the 2020-21 fiscal year budget cycle.
An exemption is only available for tangible goods. Out-of-state residents can never qualify for an exemption on services, meals or lodging.
Annual refund requests are limited to one per person, per calendar year and must include proof of total sales taxes paid in excess of $25.
Jody White, owner of White’s Finished Furniture & Hardwood in Kennewicks, was unsure how the tax exemption change would affect his business.
“I’m going to flip a coin and I’m going to say it’s going to hurt for a little while, just until the numbness wears off,” White said. “I just had a gentleman in who bought wood and he lives down in Oregon and his exact words were, ‘Yeah, I’m not coming to Kennewick to shop no more. But I’ll still come to you because you have what I need.’ ”
Martin estimates 15 percent to 20 percent of the appliance store’s customer base comes from Oregon and he hopes that will continue.
“We have a lot of loyal customers. We might get lucky and they’ll still keep coming, but I really feel bad for Pendleton. Pendleton, La Grande and Baker City, they’re a long way from anybody.”
Oregon is not the only state without a sales tax, which means shoppers from Alaska, Delaware, Montana and New Hampshire also no longer qualify for an on-the-spot exemption.
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