Washington State Sales Tax
The current state retail sales tax rate has been 6.5% for over twenty years. However, local sales/use tax rates have grown steadily since they were first authorized in 1970. The combined sales/use tax state and local rate now ranges from 7 to 9 percent. This excludes possible local transit, food, beverage, car rental, lodging and motor vehicle sales taxes.
Business & Occupation Tax
The state also has a B & O tax that generates approximately 17 percent of all state tax revenues. In contrast, corporate taxes in most other states generally produce a much smaller share, on average about 7 percent of total state revenues.
Comparative State and Local Tax Burden
Washington's degree of reliance on these types of taxes, mostly municipal taxes on utility services is twice the national average.
Local Bonds
Many local governments have pledged special excise taxes to repay bonds (eg. the rural county sales tax, hotel-motel taxes, and sales and motor vehicle taxes for transit). Under state and federal provisions banning government actions that impair contracts, those taxes may not be reduced or eliminated until the bonds are retired - even if the bonds are set to remain outstanding for 25 years.
Reporting Sales Tax to the State
Approximately 85,379 taxpayers report to the state on a monthly basis, approximately 154,640 report quarterly, and 224,758 report annually.
Sales Tax Leakage
Residents of Washington jurisdictions that border Oregon and Idaho have an incentive to shop across the border to avoid paying higher sales tax. Idaho has a maximum state and local tax of 7 percent and Oregon has no sales tax. Sales and revenues in the 14 counties bordering Oregon and Idaho would increase by an estimated 22 percent if the sales tax differntial were eliminated. Washington residents also purchase an estimated 6 percent more products remotely per capita compared to average per capita purchases because of Washington's higher sales tax.
* Source: Tax Alternatives for Washington State: A Report to the Legislature by the Washington State Tax Structure Study Committee, November 2002
State Population
Statewide population was 6,549,224 in 2008, a 10.8 percent growth compared to 2000.
Per Capita Income
Washington state personal income was $42,356 in 2007. The state ranked 14th in per capita personal income that year..
Exports
Washington state ranks number one in exports of $10,213 per capita for a total of $66,885 (millions). Louisiana ranks second with a per capita of $9,505 for a total of $41,927 (million). While California exports $144,813 (million), its per capita exports are $3,940 ranking 21st for per capita exports.
Gas Tax
As of July 2009, Washington ranked 6th in total gas tax at 37.5 cents per gallon.
Unemployment Insurance Tax
Washington ranks second on the average cost per employee of $563 for unemployment tax payments. Average weekly benefits are $366.19.
* Source: 2010 Competitiveness Redbook, Washington Alliance for a Competitive Economy
Employment Facts
Washington labor force 3,580,600
Unemployed 330,000
Seattle labor force 1,504,920
Unemployed 137,480
RETAIL TRADE 313,300
Motor Vehicle and Parts Dealers 34.1
Food and Beverage Stores 61.1
Clothing and Clothing Accessories Stores 28.7
General Merchandise Stores 65.0
*Source: Website, Workforce Explorer, Washington, data as of March 20, 2008
Where Does the State Budget Come From?
To pay for the state's activities in 2007-2009, the state will tax citizens and businesses $33.1 billion; receive federal and other grants of $17.7 billion; collect fees and assess charges for licenses and permits of $11.2 billion; and borrow $5.1 billion. Other sources, including transfers account for $1.8 billion. Washington is one of seven states that does not levy a personal income tax.
Most of the money the state uses to pay for services comes from sales tax, property tax and B & O tax, which is a tax on gross receipts rather than on profit or income.
What is the State General Fund?
The state general fund is the largest single fund within the state budget. It is the principal state fund supporting the operation of state government. All major state tax revenues are deposited into this fund. The sources of revenue are:
Retail Sales $15
B & O 5.6
Property 3
Real Estate 1.2
Public Utility 0.8
All other 3.1
Total 28.7 Billion (2007-09)
How Are State Funds Spent by Function? How Many State Employees?
Human Services $24.7 35,570
Public Schools $16.1
Higher Education $10.3 47,562
Transportation $ 7.1 11,426
Government Ops $ 5.2 10,008
Natural Resource $ 2.6
Debt Service/other $3.2
Total $69.2 Billion 111,939 Employees
* Source: 2009 Citizens Guide to the Washington state BUDGET, Senate Ways & Means Committee, www.leg.wa.gov/senate/wm/