If there's no state income tax... (Seattle, Vancouver: rental car, sales, real estate)

[marimari123]

What taxes do residents of Washington pay? If there's no state income tax, then how does the state or local government "make up" for that money?

Is it all just property tax? What about people who don't own homes?

We're interested in moving to Washington (Seattle area) and no state income tax seems too good to be true...so what's the catch?

Thanks so much.

Regards,
mari

[pw72]

High sales tax, of course! But if you don't plan on a lot of big ticket purchases, it works to your advantage.

BTW, in my opinion a high sales tax is better than an income tax, in that a lot of out-of-staters, (of which Washington has many) help share the burdon!

(Don't tell no-sales tax outsiders that they can legally exempt themselves from the sales tax....)

[marimari123]

Thanks for the quick reply. The only big thing we'd buy is probably a house. Otherwise, it's just the standard stuff (groceries, gas, clothes, etc.).

So how much is sales tax? We'd likely move to the Seattle.

We thought there are probably some other hidden taxes/fees but I guess not?

Thanks again..

Regards.

[scirocco22]

The sales tax for Seattle is 8.9%, I believe. No actual "sales tax" on the purchase of a house ...there's an excise tax on the sale of a house, though. And no sales tax on groceries/food.

But yes, maybe not hidden taxes but the state makes their money in a lot of other ways. B and O taxes, gasoline taxes, license fees, vehicle registration fees, estate taxes, tobacco taxes, liquor taxes, rental car taxes, etc. There must be something I'm leaving out. Oh, there's the food and beverage tax in King County to pay for the stadium (Safeco Field).

Here's the sales tax rates for different cities in Washington:

http://dor.wa.gov/Docs/forms/ExcsTx/..._Quarterly.pdf

Oh, here's a page from the state website on "other taxes:"

Other taxes

[pw72]

Yep, that is about right. State sales 6.5%, most cities add a couple or three percentage points on top. Groceries are tax free, unless (believe it or not) it is considered a "deli", or take-out item! (of course, what items are NOT take-out from a grocery store...silly!) Liquor, ciggs, etc. are high. Still would rather have all these than 9% or more of my income taken away! Give me the choice! Auto registration used to quite high, a referendum pushed them back, but somehow they are climibng again! As for gas taxes, they may be high, but gas prices overall are usually lower than California, and close to Oregon.

[cdelena]

Washington state tax revenue is 53% sales tax, 19% business & occupation tax, 11% property tax, and the rest RE, utility, and misc. taxes.

[Mark S.]

Originally Posted by marimari123

What taxes do residents of Washington pay? If there's no state income tax, then how does the state or local government "make up" for that money?

Is it all just property tax? What about people who don't own homes?

We're interested in moving to Washington (Seattle area) and no state income tax seems too good to be true...so what's the catch?

REALLY high sales tax. High property taxes. And registering your car almost takes a second job.

If you're wanting to move to Washingon for tax reasons, try Vancouver. No state income tax, and you can do most of your shopping across the border in Portland, where there is no sales tax. Lots of retirees go there for this very reason.

And Portland is a nicer town than Seattle anyway.

[WendyK]

There's also a state excise tax paid on real estate when you sell property. The rates varies from county to county but is approximately 1.5 - 2% of the sales price.

[StealthRabbit]

Originally Posted by marimari123

What taxes do residents of Washington pay? ...no state income tax seems too good to be true...so what's the catch

As rocco mentioned... WA state seems to get theirs...especially by gouging business owners, and recently property owners. WA ranks very high on overall tax burden, (which can be mitigated as pw recommended; don't be a huge consumer)

The no income tax was a major benefit when I had income... (my employer of 32 yrs pulled my plug just 6 wks shy of retirement). The prop tax is squeezing me out now, It might be better to rent in some cases. (and own other realestate where you can pass the costs onto tenants)

WA does have a HUGE surplus at the moment and seems to be pretty fiscally responsible as compared to some of our neighbors.

In any event, you may pay; I drove 'beaters' for 25 yrs when our car tabs were SO expensive, So you can beat the system. , but I'm still driving beaters... no AC in my $35.00 pickup that gets 50 mpg on free fryer grease
And I keep my self employment / business expenses / income minimal while in WA. (B&O, personal property, and Use Tax will really 'getcha') Beat the system by being a High income Employee, and rent a place that pays prop taxes, without passing on the cost to you. then you the own a commercial place that charges triple net rent, and the tenants pay your high property taxes!

[marimari123]

Wow..thanks for all of the replies and useful info. But what are B&O taxes and Use Tax?

Mari