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THE ASTORIAN • SATURDAY, JULY 6, 2019
What Washington can’t tax, Oregon might
Concern over
business tax
By KATE DAVIDSON
Oregon Public Broadcasting
On July 1, Washington
state stopped letting Oregon
shoppers skip paying sales
tax at the register, with a few
exceptions. Some businesses
in s outhwest Washington fear
the change will drive away
Oregon customers who won’t
want to cross the river to shop
when there is no sales tax at
home.
Now it appears some of
those businesses might face
an additional hurdle in the
future. It’s called House Bill
3427 — Oregon’s new busi-
ness tax.
Take the case of Dan’s
Tractor Inc. outside Battle
Ground, Washington.
Owner Skip Ogden says
about 20% of his business
came from Oregonians last
year. That’s more than $1
million in gross revenue.
At fi rst, Ogden worried
about losing those customers
to the sales tax change.
“Knowing these custom-
ers like I do, Oregonians do
not like to pay sales tax for
any reason whatsoever,” he
said.
But right before the point-
of-sale tax exemption ended,
Ogden read a special notice
from the Washington Depart-
ment of Revenue. It basically
said: out-of-state deliveries
don’t count. If you’re deliver-
ing in Oregon, you don’t have
to charge retail sales tax.
Turns out, Ogden delivers
most of the tractors Orego-
nians buy from him.
“Oh, it’s a big relief,”
Ogden said on the phone.
“Problem solved.”
Enter Oregon HB 3427.
Remember Oregon’s big
new business tax? The one
meant to inject $1 billion a
year more into K-12 educa-
tion? The one that prompted
Republican lawmakers’ fi rst
walkout?
Gov. Kate Brown signed
the tax into law in May,
though it could still face a
ballot challenge.
Even though it’s often
described as a tax on large
Oregon businesses, if the new
tax goes into effect it will
also impact some out-of-state
companies that do business in
Oregon.
“It’s a signifi cant revenue
policy,” said Chris Allanach,
Oregon’s legislative revenue
offi cer.
Under the law, if out-
of-state companies have
$750,000 worth of commer-
cial activity in Oregon they
will have to register with the
state.
They’ll be subject to the
tax itself if they have at least
$1 million of commercial
activity sourced to Oregon.
What does “sourced to
Oregon” mean?
When it comes to the sale
of tangible personal prop-
erty, like tractors, the law
states commercial activity is
sourced to Oregon, “if and
to the extent the property is
delivered to a purchaser of
this state.”
“Somebody goes up to
Vancouver and buys some-
thing and then they sell it into
Oregon. Certainly sounds
like an Oregon sale,” Alla-
nach said.
Still, Allanach said, this
could be a gray area. Details
of the tax’s implementa-
tion will be ironed out in the
administrative rules process.
As for Ogden and his mil-
Photos by Kate Davidson/Oregon Public Broadcasting
Dan’s Tractor Inc. owner Skip Ogden stands at the counter of his southwest Washington store.
lion dollars-plus in annual
sales to Oregonians, it’s far
from clear he’d have to pay
the commercial activities tax.
For any company, tax lia-
bility depends on fi nancial
details — like how much gets
spent on labor or the cost to
the company of the goods it
sells.
What is clear is that under
HB 3427, more out-of-state
businesses will have to reg-
ister in Oregon. And what
Washington can’t tax, Ore-
gon might.
‘KNOWING THESE CUSTOMERS LIKE I DO,
OREGONIANS DO NOT LIKE TO PAY SALES TAX
FOR ANY REASON WHATSOEVER.’
Skip Ogden | owner of Dan’s Tractor Inc. outside Battle Ground, Washington
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Kubota vehicles sit on the lot at Dan’s Tractor Inc. near Battle Ground, Wash.
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