City of Blaine
Sales & Use Taxes EAST BLAINR Tax Increment Financing (TIF) PROJECT ANALYSIS
Of the 8.8% sales tax currently collected in the City on general retail purchases, a 1% “local” share
of the tax accrues to local jurisdictions. The City receives 85% of the 1% local tax and Whatcom
County gets 15%. This tax is levied on businesses in the area, and also on construction activity and
some transactions related to housing and business, such as certain online purchases and the
delivery of personal and commercial goods. The current rate accruing to the City for the local
option is 0.85%. The city also receives sales tax proceeds from. The City also receives a population
pro rata share of 90% of the city allocation of Whatcom County’s 0.1% criminal justice sales tax.
Increase in the criminal justice tax is modeled on net increases in population due to development.
The sales tax relies on estimates of new construction value and consumer taxable retail sales
spending. These assumptions are driven by valuation and use assumptions in the development
program detailed below.
Business and Occupation Tax
The City imposes a business and occupation tax on gross income of businesses doing business in
the city. For city apportioned gross business income, the city levies a 0.2% tax.
Utility Taxes
The City imposes utility taxes on gross purchases of electricity, water, wastewater, solid waste,
telephones, cable, and natural gas. Current tax rates are used for this analysis. A generalized utility
expenditure productivity factor (on a per person and employee basis) was used to generate
estimates of utility purchases.
• Water: 9%
• Wastewater: 9%
• Electric: 6%
• Natural Gas: 6%
• Solid Waste: 6%
• Cable/Internet: 6%
• Telephone/Mobile: 6%
• Stormwater: 9%
State Shared Motor Vehicle Fuel Tax & Liquor Board/Taxes
Local governments receive a gas tax distribution that is unrestricted for street purposes from the
State. The distribution is determined using a formula that is heavily weighted towards population.
ECONorthwest used a proxy of this formula to derive these revenues to the City. Cities also receive
pro rata payments from Liquor Excise Tax & Liquor Board Profits.
Real Estate Excise Tax (REET)
Real estate transactions are subject to a 0.5 percent tax on the value of the transaction. REET
revenues are placed in the capital restricted funds to finance capital projects. REET revenues are
uncertain given volatility in the real estate market. Since REET is based on the total value of real
estate transactions in a given year, the amount of REET revenues the City receives can vary
substantially from year to year based on the normal fluctuations in the real estate market. During
years when the real estate market is active, revenues are higher, and during softer real estate
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markets, revenues are lower. For the purposes of this analysis, it is assumed that all new completed
projects would be sold and then 0.4 percent of all property value would turn over (re-sold) in any
given year (this ratio in the historical average of REET sales to total assessed value in the city in
2021).
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