Sales tax is the City’s primary source of funding for general City services. It is the single largest revenue source in the General Fund. In addition, sales tax is a dedicated funding source for transportation-related capital projects ($670,000) and neighborhood capital improvement projects ($100,000).

Sales tax is levied on the sale of consumer goods (except most food products and services) and construction. In Kirkland, retail businesses are the largest generator of sales tax, followed by contracting, wholesale and service businesses. The amount of revenue generated by sales tax fluctuates from year to year due to changes in the economy, buying habits of consumers, and the level of construction taking place in the City.

The sales tax rate within the City of Kirkland is 8.8 percent. Of the 8.8 percent, 1 percent (less 0.15 percent that goes to King County) is returned to the City of Kirkland, and the remainder is distributed to the State and other public agencies.

In 1995, the State Legislature granted King County the authority to impose an additional 0.5 percent sales tax (effective 1/1/96) on food and beverages sold by restaurants, taverns, and bars (bringing the current total sales tax rate for these establishments to 9.3 percent). This additional tax revenue is distributed to a Baseball Stadium Fund to pay the debt service on a professional baseball stadium.

In November 2000, King County voters approved a 0.2 percent increase in the sales tax rate to partially restore transit funding lost when the motor vehicle excise tax was repealed by the passage of Initiative 695 (and then by the state legislature).

As of July 1, 2003, an additional 0.3 percent sales tax was imposed by the state legislature on vehicle sales and leases to fund transportation improvements. The distribution of the sales tax is as follows:

Sales Tax Distribution

Jurisdiction

Rate (%)

State of Washington

6.50

King County/METRO

0.80

King County Criminal Justice Levy

0.10

City of Kirkland
City Portion
County Portion


.85
.15

Regional Transit Authority

0.40

Total Sales Tax Rate

8.80

Additional 0.3% for automobile sales/leases (to fund transportation)
Total Sales Tax Rate for Automobile Sales and Leases Only



9.10

Additional 0.5% Food and Beverage Tax (for Baseball Stadium Fund)
Total Sales Tax Rate for Restaurant Food and Beverage Sales Only



9.30