Cross-border shoppers from Grand Forks won’t be exempt from Washington State sales tax for the time being.

On June 30, Judge Susan Cook, of the Skagit County Superior Court, issued a temporary restraining order that prevents Washington’s revenue department from suggesting retailers exempt residents from British Columbia and other provinces from state taxes.

The order was filed by Whatcom County and the City of Bellingham – Bellingham is situated near the Canada-U.S. border.

Mike Gowrylow, spokesperson for the Washington State department of revenue says it was an Ex Parte court appearance, where representatives of the department were not present in court when the restraining order was issued – they were only notified shortly before the hearing.

“(The order) got put before the judge because the City of Bellingham and Whatcom County sued the (Department of Revenue) challenging our interpretation of law,” explained Gowrylow.

“The judge issued a temporary restraining order pending another hearing, which was originally going to be July 9 but has now been rescheduled to this Friday (July 16), at which the city and county must make a convincing case that (the department of revenue’s) interpretation is wrong and their’s is right.”

There are a number of ways the situation can play out at the next hearing according to the department of revenue’s spokesperson.

“The temporary restraining order is only in effect until July 16 and then the judge has to decide whether to continue it, so the judge has choices,” Gowrylow said.

“The judge could say, ‘Well, I’m not convinced that the local government’s going to prevail in this argument based on the filings by the department of revenue and any other interceders that might come along and possibly some retailers may want to file a brief too.”

Gowrylow also says that if the judge feels that the city doesn’t make enough of a case, she could let the suit go forward but let the temporary restraining order expire.

The revenue department had earlier suggested that state merchants could exempt residents of B.C. from state sales tax because of the implementation of the Harmonized Sales Tax (HST) on July 1.

According to a release from the state dated June 8, “State law allows a sales tax exemption to residents of jurisdictions that impose a sales tax of three percent or less.”

Because the HST was interpreted as a value-added tax, as opposed to a sales tax, it was thought that British Columbians could be exempted at the discretion of the merchant.

The state said that exemptions could be made to personal property but not hotel accommodations, meals at restaurants and other similar services.

At the time, some local merchants, such as His ‘n Her Fashions store owner Peter Perepelkin, stated that they were not happy with the state’s plan.