British Columbia, Ontario Residents to Become Eligible for Non-resident Sales Tax Exemption in Washington

Beginning July 1, residents of British Columbia and Ontario become eligible for a non-resident sales tax exemption on purchases of goods in Washington for use outside the state.

State law allows a sales tax exemption to residents of jurisdictions that impose a sales tax of three percent or less. Washington sellers are not required to make tax-exempt sales to qualifying nonresidents, but most do.  The exemption applies only to tangible personal property and does not apply to lodging, meals, or other retail services that are provided in the state.

In order to receive the exemption, qualifying residents must show proof of residency, such as a driver’s license, to the Washington seller. The seller must retain the information to support the exemption in the event of a tax audit.

Residents of British Columbia and Ontario previously did not qualify for the exemption but both provinces are adopting a harmonized sales tax (HST) in tandem with the Canadian federal government beginning July 1. The HST technically is a value-added tax (VAT) and not a sales tax.

Residents of other Canadian provinces that impose the harmonized VAT have been eligible for the exemption for years.

Five states, including Alaska, Oregon, Montana, Delaware and New Hampshire, seven other Canadian provinces, and four U.S. possessions already qualify for this exemption.

The exemption statute, RCW 82.08.0273, was enacted in 1965.

Source: Washington State Department of Revenue

Related articles:
Instructions for Retailers on Sales Tax Exemption for British Columbia Residents Now Available
Judge Issues Order Barring Department of Revenue from Advising Retailers on Sales Tax Exemption for British Columbia Residents

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