[Vision2020] sales tax
Mark Solomon
msolomon at moscow.com
Thu Jul 7 13:19:47 PDT 2005
All,
I wish that all sales tax dollars collected in Moscow came back to
Moscow or even Latah County, but that's not how it works. Only 11.5%
of sales taxes collected are sent back to the cities and counties of
the state. The rest goes to various places the Legislature has
directed (mostly the state general fund).
Even then, it is not dollar for dollar (or 11.5%/dollar) but is
distributed by an arcane formula stipulated by the Legislature that
is based on ratio of population and increment change in assessed
market value across all the cities and counties of the state. The
formula tends to favor cities and counties with large growth rates
which may or may not have anything to do with the amount of retail
sales. To the best of my knowledge, the distribution formula hasn't
changed in decades while the state retail shopping patterns certainly
have. As an example, the sales tax collected at the Palouse Mall
likely comes from WA residents as well as Moscow residents but the
formula only counts changes in Moscow population as a ratio of
distribution.
The only tax that is collected that goes 100% to local units of
government is the property tax. Sales or income taxes, as currently
distributed, are not substitutes.
Mark Solomon
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