Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Sales Tax Sourcing topic
No spam. Unsubscribe anytime.
Kent’s industrial output large but sales-tax sourcing change costs city revenue, speaker says
Summary
A speaker at a recent meeting said the City of Kent produces billions in manufacturing and wholesale output but lost sales-tax revenue after Washington state changed sourcing rules in February 2008; the speaker said the city raised local business taxes and faces greater road and pollution burdens as a result.
A speaker at a recent meeting said the City of Kent’s large industrial base generates billions in economic output but that a 2008 change in Washington state sales-tax sourcing shifted revenue away from the city.
“The city of Kent is conveniently located between the Port Of Seattle, Port Of Tacoma, and SeaTac Airport, which are all key, sea, land, and air trade routes,” the speaker said. “Many manufacturing and warehousing companies choose to locate in Kent because of this strategic location, and over 12,000 companies recognize the Kent Valley as a prime hub for commerce.”
The speaker said the city has the second-highest share of manufacturing jobs in the state and cited roughly $16,000,000,000 in manufacturing output and about $7,000,000,000 in annual wholesale-trade output. The speaker also said the Kent Valley employs more than 232,000 workers and contains about 106,000,000 square feet of industrial space.
“But you’d think this all means that the city of Kent receives plenty of sales taxes from all of this economic activity. Right? Unfortunately, it does not,” the speaker said, explaining that Washington state changed how it distributes sales-tax revenue in February 2008 so that tax is sourced to where goods are shipped to rather than where they originate.
The speaker said the city has more than 22% of its land zoned for industrial and warehousing uses that, under the current sourcing rules, do not produce proportional sales-tax revenue for the city. To offset the shortfall, the speaker said, the City of Kent has imposed higher business-and-occupation and square-footage taxes than some neighboring cities. Even so, the speaker said the city generates “barely over half” of what similarly sized cities generate per capita.
The speaker linked the revenue shortfall to local impacts: high truck traffic and pollution concentrated in Kent, faster road degradation, and what the speaker described as an inequitable distribution of state-collected tax revenue that benefits ports and wealthier jurisdictions at Kent’s expense.
“As you can see, Band Aid solutions have let Kent fall behind,” the speaker said, and urged the state legislature to change the sales-tax sourcing rules to “right this wrong and uplift Kent.”
The remarks in the transcript constitute presentation and public comment and do not record a formal vote or staff direction in the meeting record.
