Do Oregon Residents Pay Sales Tax in Washington?
Oregon residents are often exempt from Washington's sales tax. This exemption has specific rules regarding proof of residency, goods, and services.
Washington has a statewide retail sales tax, while its neighbor Oregon does not. Because a point-of-sale exemption for Oregon residents on most goods has been discontinued, a refund system is now in place. Oregonians who shop in Washington must understand the refund process and the few remaining point-of-sale exemptions to recover the state’s sales tax.
The Sales Tax Refund for Oregon Residents
Washington law allows residents of states with a sales tax rate below three percent, like Oregon, to request a refund of the state portion of the sales tax they pay. For most purchases, an Oregon resident must pay the full sales tax and then apply to the Washington State Department of Revenue. This refund process applies to tangible personal property, such as clothing and electronics, that the buyer takes from Washington for use in their home state. The refund does not include the local sales tax portion, which varies by location.
How to Claim the Sales Tax Refund
A person can submit one refund request per calendar year for purchases made in the previous year. The request must be for a total of $25 or more in state sales tax paid. To apply, you must provide copies of all receipts and proof of residency, such as a valid Oregon driver’s license or ID card. Making fraudulent statements to obtain a refund is considered perjury and carries penalties, including unpaid tax and additional fines.
Purchases Still Exempt at the Point of Sale
Certain sales remain exempt from sales tax at the time of purchase for qualifying nonresidents, including the sale of motor vehicles, watercraft, and farm machinery. For these purchases, an Oregon resident can complete the transaction without paying sales tax by providing valid proof of residency to the seller.
What Isn’t Eligible for a Refund?
The sales tax refund is limited to tangible personal property removed from Washington before use. Several categories of goods and services are not eligible for a refund because they are considered consumed within Washington. Services, such as car repairs or landscaping, are subject to Washington sales tax and are not eligible. Other exclusions include lodging, such as hotel stays, and meals consumed in restaurants.