Posted: July 16, 2010 3:50:08 PM PDT
Whatcom County Prosecuting Attorney Dave McEachran's statement regarding today's preliminary injunction:
"I am extremely pleased with Judge Rickert's decision today. As we worked on this case the Department of Revenue position never made any sense. It was always apparent that British Columbia residents paid a sales tax and they also pay a use tax on items brought into Canada. Because of this they would not qualify for this exemption," Whatcom County Prosecuting Attorney Dave McEachran said.
Judge requires state to tell retailers to collect sales taxes
Skagit County Superior Court judge Michael Rickert granted a preliminary injunction today (July 16, 2010) requiring the state Department of Revenue to instruct all Washington retailers to collect state sales taxes from residents of all Canadian provinces while legal steps are in progress.
Judge Rickert ordered the state Department of Revenue to tell retailers that the exemption originally intended to address tax issues on the Washington-Oregon border won't apply to Canadian shoppers while a lawsuit is still pending. Attorneys representing Whatcom County and the City of Bellingham had argued that British Columbia residents should not get the exemption, but Rickert expanded the ruling to include all Canadians under a similar taxation system to avoid inconsistencies and confusion at the cash register.
Rickert said the case would be expedited to the state Court of Appeals for further review.
Today's preliminary injunction is the second response to action filed by Whatcom County and the City of Bellingham in Skagit County Superior Court, challenging a recent state ruling that allows Canadian shoppers to forgo paying sales taxes on some purchases in Washington. Skagit County Superior Court judge Susan Cook issued a temporary restraining order on the matter on June 30, 2010, which led to retailers questioning whether or not they should collect state sales taxes.
Whatcom County Prosecuting Attorney Dave McEachran and County Executive Pete Kremen continue to partner with the City in this effort, jointly arguing their stance that the statute in question provides no exemption for Canadian shoppers.
“The judge's opinion that our case has the likelihood of prevailing was extremely poignant and encouraging," County Executive Pete Kremen said.
"This decision is good for Whatcom County, but especially good for retailers who now have clear rules on what they must do in relation to collecting sales tax from Canadians," said Ken Oplinger, President/CEO, Bellingham/Whatcom Chamber of Commerce and Industry.
Bellingham Mayor Dan Pike said, "We are very pleased that our work together has resulted in clarity for our retail businesses and moves us closer to a court ruling on the merits of the case." Pike also acknowledged the excellent legal work provided to this case by City Attorney Joan Hoisington and Whatcom County Prosecuting Attorney Dave McEachran.
While the opportunity for savings may attract more B.C. shoppers to our communities, Whatcom County officials say the increase in total sales, and subsequent increase in B&O taxes collected, would not make up for the loss of sales tax revenues to local governments if the Department of Revenue ruling prevails.
The state Department of Revenue is expected to publish new guidance to Washington retailers as the result of today's court decision. When new rules are published they will be made available at www.cob.org
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Media Contacts:
Whatcom County Prosecuting Attorney Dave McEachran, 360-676-6784
Bellingham Chief Administrative Officer David Webster, 360-778-8100
Whatcom County Executive Pete Kremen, 360-676-6717
Ken Oplinger, President/CEO, Bellingham/Whatcom Chamber of Commerce and Industry, 360-734-1330 or 393-9171
