PORT ANGELES — Clallam County in July will become the first local jurisdiction in the state to lower its optional sales tax, officials said.
The three commissioners Tuesday set a 10:30 a.m. May 12 public hearing on a previously approved 0.2 percent sales tax reduction that will take effect July 1.
The public hearing is needed to pass an ordinance making the change that was approved by resolution.
The hearing on an ordinance to amend the sales tax rate will be in Room 160 at the county courthouse, 223. E. Fourth St., Port Angeles.
The sales tax rate for nonvehicle purchases in unincorporated areas will be lowered from 8.4 percent to 8.2 percent. The vehicle sales tax will be reduced from 8.7 percent to 8.5 percent.
Two weeks ago, commissioners passed a unanimous resolution to notify the state Department of Revenue of the upcoming sales tax reduction.
The move surprised state officials, who tried to raise “significant legal hurdles” in early communications with county officials, Commissioner Mike Chapman said.
“We found out that this is the first time this has ever happened, and that’s why the state of Washington is so unsure as to how to do this,” Chapman said Tuesday.
“Yes,” County Administrator Jim Jones said. “I’ve been told that they can find no other recorded instance in Washington state history where a county or a city actually reduced their sales tax rate.
“Now, there’s a few that didn’t take it at first, or a portion. But they didn’t have a process,” Jones said.
Counties have a 0.5 percent optional sales tax that can be reduced or declined altogether.
Several counties have always taken less than the full amount.
Beginning in July, Clallam County will collect 0.3 percent of the optional sales tax rather than the full 0.5 percent.
“They were trying to argue that we couldn’t do it by resolution just because they had never had it done before,” Jones said.
“They did finally accept the resolution.”
The resolution simply notified the state of the change.
“We can notify them by a tin can and a string,” Commissioner Jim McEntire said.
Jones predicted that state officials would revise the law to outline a process for counties and cities to lower their sales tax rates.
“Just in case other people start doing it, they want to make sure that everybody does it the same way,” Jones said.
“And I appreciate it. That’s what bureaucracies are about.”
Chapman thanked Jones for being steadfast with Revenue officials on behalf of the board.
“At first, they made it sound like they didn’t have a process to do this,” Chapman said.
The open-ended sales tax holiday is expected to save Clallam County taxpayers $360,000 from July 1 to Dec. 31.
Commissioners will revisit the sales tax when they develop the 2016 budget.
A sales tax reduction is just one element in a wide-ranging board plan to spend down excess general fund reserves.
Commissioners have recently approved a $300,000 expenditure to shelter providers, a $150,000 appropriation to the Clallam County Economic Development Council, reinstated a 40-hour workweek for union employees and expanded the operating hours of the county courthouse by a half-hour.
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Reporter Rob Ollikainen can be reached at 360-452-2345, ext. 5072, or at rollikainen@peninsuladailynews.com.