The sales tax hit the 10 percent mark in parts of Pierce, King and Snohomish counties — and broke the barrier in a few communities — as of April 1, thanks to Sound Transit’s half-percentage-point increase.
Tacoma and Seattle are now at 10.1 percent; not only is that higher than surrounding towns, it doesn’t even have the slightly mitigating offset of being easy to compute in one’s head.
If area taxpayers are feeling grumpy about that — and they are — they can at least console themselves that even at 10.1 percent they’re not paying the highest sales tax in the state. That dubious honor falls to several cities in Snohomish County, including Mill Creek and Lynnwood (10.4 percent) and Edmonds, Bothell and Mukilteo, among others (10.3).
Some consolation, huh?
On a $100 item, a 10.1 percent sales tax is $10.10, up from $9.60 under the old schedule for Tacoma. Fifty cents is probably not enough to get you to change your shopping habits. Is a $5 increase on a $1,000 purchase enough to notice?
That’s one of two questions to watch as this latest increase becomes retailing reality. The other: Will this and other tax increases, enacted and proposed, change people’s political habits?
People don’t have to pay 10.1 percent in sales tax. They could seek out the state’s lowest sales-tax rate, which according to a Department of Revenue chart appears to be in the unincorporated areas of Klickitat County, at 7 percent. Don’t know how much retailing those areas hold, or how much there is in the county’s metropolises of Bingen, Goldendale and White Salmon, each at 7.5 percent, but if you’re in the neighborhood anyway …
But consumers don’t need to go wandering so far from home to catch a break. Retailers in Snohomish County, especially in the northern part, might be a bit nervous about the temptation that lies across the line in Skagit County, where the rate for unincorporated areas is 8.1 percent; for most of the cities it’s 8.5 (Mount Vernon goes all the way to 8.7).
How about Pierce County? Tacoma has the highest rate, with a number of close-in towns (including Puyallup, Ruston, University Place and Lakewood) right behind at 9.9 percent. But cross the bridge to Gig Harbor and you’re paying just 8.5 percent. And you can find some areas — unincorporated Pierce County outside Sound Transit’s reach, Buckley – as low as 7.9 percent.
Of course, if you want to eliminate the sales-tax portion of the bill, and are willing to ignore the use-tax obligation, Oregon is only too happy to remind you (and does in its advertising) that it has no sales tax.
You could also find an internet retailer with no physical presence (the fancy-pants term for that is “nexus”) in Washington and thus doesn’t collect sales tax, although again there’s that pesky use-tax deal.
Are the dollars and cents involved in differing sales-tax amounts sufficient to change behavior? They are if the items being sold are expensive enough, and it won’t just be consumers making a change. Consider the store owner or the developer of retailing property. If they absolutely have to be in the center of activity, such as a downtown, then the big sales-tax hit to customers is unavoidable. But those who have some flexibility in location may well take a close look at Revenue’s chart of sales-tax rates by location, as well as maps showing exactly where the boundaries of those locations are.
Consumers and business owners are also taxpayers, leading to a question posed recently by a correspondent, who wondered about the impact of the most recent sales-tax increase on future tax-raising ballot proposals and whether the tipping point has been hit.
By itself, maybe not. The problem is that it’s not by itself. Sound Transit got approval to raise three different taxes. Received your car-tab renewal notice and bill yet? There’s some happy reading.
And the hits just keep on coming. The mayor of Seattle and the King County executive say they want a sales-tax increase ballot measure next year for homeless programs. The executive has also floated a sales tax increase to fund arts groups. As long as the Legislature is in session, there’s a danger of tax increases coming from Olympia.
Last December a proposed sales tax increase for mental health programs failed to get sufficient votes in the Pierce County Council; one of the concerns raised by opponents was that taxpayers were being hit by other increases. Other entities may have designs on tax-increase proposals this year. But no one wants to be the one to test the taxpayer’s tolerance for more taxes to the point the question “Did that hurt?” is answered with the retort “Yes. Allow me to demonstrate on you just how much.”
Bill Virgin is editor and publisher of Washington Manufacturing Alert and Pacific Northwest Rail News. He can be reached at email@example.com.