As a Washington resident, you might know people in other states who complain about their state income tax burden. While we enjoy the benefit of no state income tax, our state’s unique tax structure comes with its own considerations that affect your overall financial picture.
Washington is one of nine states that does not collect state income tax. This translates into keeping more of a paycheck. However, our state needs to generate revenue through other means, primarily our state sales tax. Here in Bellingham, we pay a combined sales tax rate of 9%. 6.5% goes to the state and 2.5% to Whatcom County and the City of Bellingham. This can add significantly to the cost of purchases.
Property taxes are another significant source of revenue. They help fund public schools, emergency services, parks and recreation and roads. The rate varies by location and is calculated per $1000 of assessed valuation.
Tax Planning Strategies for Bellingham Residents
- Time your purchases strategically. Watch for seasonal sales. Often items are on sale at specific times of the year.
- Check to see if you qualify for a property tax relief program. In Whatcom County the Senior/Disabled Property Tax Exemption Program may provide significant relief if you meet the income requirements, are at least age 61 or disabled.
- Keep receipts for large purchases, charitable donations and anything that improves the value of your property. Purchases made by check or credit card may be useful in the current tax year as well as in future years.