Whatcom County fighting sales tax exemption for Canadians



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Posted on June 16, 2010 at 2:32 PM

Updated Wednesday, Jun 16 at 5:19 PM

WHATCOM COUNTY, Wash. - City and County officials in Whatcom County are fighting back against the Washington Department of Revenue's decision to lift the sales tax for visitors from British Columbia.

County Executive Pete Kremen says the decision could crush the county's already tight budget. In a letter obtained by
KING 5, Kremen urges Gov. Chris Gregoire and the Department of Revenue to hold off on the tax exemption until the state legislature
can address the issue in January.

"The impact on Whatcom county could be disastrous", says Kremen. "I think it's worse than the state realizes."

The Department of Revenue says it is moving forward with a sales tax exemption on British Columbia residents beginning July
1. The exemption comes as B.C. moved to a "Harmonized Sales Tax," making residents eligible for the exemption. 

In Whatcom County the sales tax is 8.5 percent. Early estimates suggest as much as 10 percent of local retail in Bellingham may be to Canadians. The city of Bellingham received around $16.2 million in total sales tax revenue last year. Whatcom County got $12.5 million.

But while city and county governments fight the exemption, local retailers welcome the extra business that no sales tax may

"It's an incentive for more customers," said Larry O'Connell, owner of Aqui Esta Tile and Stone in Bellingham. "Now is the time
when we need more business. Maybe the extra sales will eventually help the County budget."

State Rep. Kelli Linville, D-Bellingham is already drafting legislation that could reverse the exemption. The State Legislature
convenes in January.