Recent News: Judge Suspends sales-tax exemption for BC residents
Source: The Bellingham Herald, July 16, 2010
Supreme Court Judge Susan Cook ordered Revenue to warn retailers that the legality of the exemption was in dispute, and if retailers failed to collect sales tax from B.C. shoppers, they could face later liability for paying that tax themselves. Read more
Background
The State of Washington announced effective July 1, 2010, a tax exemption would apply to residents from BC and Ontario for goods purchased.
- Washington gives its retailers the option to waive the state's 6.5 per cent sales tax for residents living in areas with sales taxes below three per cent. Washington State's Department of Revenue considers the tax to be zero since the harmonized tax is "value added," (VAT) rather than a straight sales tax.
- Tax exempt sales to these residents are at the discretion of the seller.
- When making tax exempt sales, the seller must see photo identification, such as a driver's license, issued by the buyer's state of residence.
- The seller must also record certain information. This exemption only applies to sales of goods which will not be used in Washington. It does not apply to lodging, restaurant meals, or other sales which involve consumption in Washington.
- The state already offers a similar exemption to provinces that already have the HST, such as Nova Scotia, New Brunswick, Newfoundland and Labrador and Quebec.
For more information:
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