The Sound Transit light rail near the new Mountlake Terrace station. Public transit is a big factor behind higher sales tax rates in south county cities. (Olivia Vanni / The Herald)

The Sound Transit light rail near the new Mountlake Terrace station. Public transit is a big factor behind higher sales tax rates in south county cities. (Olivia Vanni / The Herald)

3 Snohomish County cities have highest sales tax rate in state

Sales tax statewide is 6.5%. In Lynnwood, Mukilteo and Mill Creek, it’s 10.6%. So where does that extra revenue go?

LYNNWOOD — Three cities in Snohomish County are tied for the highest sales tax in Washingto`n at 10.6%.

Lynnwood, Mukilteo and Mill Creek tax higher than Seattle’s rate of 10.25% — or any other city in the state.

In all cities and counties, the state imposes a base 6.5% sales tax rate. With no income tax in Washington, sales taxes are the state’s primary revenue stream. The state collected over $14 billion in sales taxes in 2021, according to the state Economic and Revenue Forecast Council. In almost every city across the state, an extra 1% tax funds city and county services.

At 9.3%, unincorporated Snohomish County’s tax rate trails only King and Pierce counties.

So where do those extra revenues go? And why is Snohomish County taxed more?

For south county cities, like Lynnwood, the top answer is public transit. After voter approval in 2016, an extra 1.4% sales tax was imposed to fund Sound Transit’s development of the Link light rail into Snohomish County.

That extra money will pay off soon, as the Lynnwood extension of the train is expected to arrive by the end of 2024. The train isn’t expected to arrive in Everett until 2037.

Shoppers in Mountlake Terrace see a tax rate of 10.5%. Although that’s the second-highest in the state, the city only gets 1 cent of every dollar taxed, City Manager Jeff Niten said. That portion makes up about 14% of Mountlake Terrace’s annual revenues. Last year, the city of about 20,000 collected $2.9 million. Next year, the city expects to get $3.9 million.

The rest of the city’s sales taxes are split between the state, county and transit districts.

The local funds support “police, parks and recreation, human resources, etc.” Niten wrote in an email.

The million-dollar increase in expected revenue is due to development projects in the city. In this case, it’s Mountlake Terrace’s new Sound Transit station that’s set to welcome the light rail through by the end of next year.

Materials delivered to the city for construction are taxed with Mountlake Terrace’s tax rate, Niten said, which can drive up revenue.

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Everywhere in Snohomish County — except for Everett and so-called “non-regional transit authority areas” — must pay a 1.2% sales tax to sustain Community Transit. Everett residents and visitors pay a 0.6% sales tax for Everett Transit. Some cities like Lynnwood and Marysville tax an extra fraction of a percent for their transportation benefit district to pay for road maintenance.

In any Snohomish County city, an additional 0.4% tax is routed to county government for specific uses. That pays for:

• Emergency communication systems and facilities;

• Criminal justice purposes;

• Mental health and chemical dependency services;

• Affordable housing and related services.

That last portion goes toward offering, acquiring and building affordable and emergency housing.

Earlier this month, the Snohomish County Council approved an investment plan for this tax that would construct 550 units of affordable housing. After collection began last year, the 0.1% sales tax is expected to amass $118 million by 2026.

Jenelle Baumbach: 360-352-8623; jenelle.baumbach@heraldnet.com; Twitter: @jenelleclar.

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