Essay on Cross Border Shopping From Washington State
Tax policy is one strategy that states have to increase their competitiveness. From the 50 states nationwide, only five states do not impose sales tax or have a 0% sales tax rate; they are Alaska, Delaware, Montana, New Hampshire and Oregon. Without sales tax, people can buy in these five states without spending extra money on tax and they can have extra ‘money’ for saving or spending on other goods. Compared to some other states, they mostly charge ‘double’ sales taxes, which is state sales tax and local sales tax.
This non-sales tax policy, for sure, brings some changes or impact to these states as well as their neighboring states. Oregon and Washington are the states that have ‘strong relationship’ due to the non-sales tax policy of Oregon. Washington is the fifth highest of combined state and local sales and use taxes with average rate 8.89 % in the US. The significant difference in sales tax rates between these two states makes Washington’s residents prefer to shop in Oregon rather than in their own state, which is known as ‘cross-border shopping’. As a result, Washington loses a large amount of potential revenue from sales and use tax. The following paragraph below will explain determinant factors and impacts of cross-border shopping from Washington state to Oregon state due to non-sales tax policy of Oregon state.
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