Washington Business 2019 Legislative Review & Vote Record | Page 32
2019 legislative review
U.S. Constitution’s Commerce Clause by
applying exclusively and in a discriminatory
fashion to banks headquartered out-of-
state. Banks are already subject to tax at
the high professional services rate of 1.5
percent, and are also subject to the B&O
surcharge in E2SHB 2158.
ESSB 5997
non-resident sales tax
exemption
Passed/AWB Opposed
Washington retailers have been able to
offer a sales tax exemption to consumers
from Oregon, Alaska, Montana and other
states and Canadian provinces with a
sales tax rate less than 3%. Engrossed
Substitute Senate Bill 5997, sponsored
by Sen. Christine Rolfes, D-Bainbridge
Island, changes that exemption into a
“remittance” program for only the state
portion of the combined state and local
sales tax. A consumer will need to save
receipts and file for a remittance once per
year, and is only eligible if the combined
state portion of the sales tax is greater
than $25. AWB opposed this primarily out
of concern about reducing the volume of
businesses in border communities.
SHB 1403
simplifying municipal b&o
tax
Passed/AWB Supported
Substitute House Bill 1403, sponsored
by R ep. No el F r a me , D - Gre enwo o d ,
implements the unanimous
recommendation of the Local
Appor t ion ment Ta sk Force. The bi l l
simplifies the service income factor in the
two-factor formula used to apportion the
gross receipts of service businesses among
various cities in which the business may
30 association of washington business
Rep. Luanne Van Werven, R-Lynden, chats with Rep. Matt Boehnke, R-Kennewick. Both serve on
the House Innovation, Technology & Economic Development Committee. Boehnke is assistant
ranking minority member on the panel.
operate. Unlike the old formula, the new
formula will rely on information typically
ava i la ble i n com mercia l t ra n sac t ion
receipts and captured by common business
recordkeeping systems. The bill a lso
established a consistent burden of proof
for any taxpayers seeking application of
an alternative apportionment method
when the statutory method does not fairly
represent the extent of the taxpayer’s
business activity in the city.
2SHB 1059
extending b&o tax return
filing date
Passed/AWB Supported
The Depa r t ment of Revenue a ssig n s
taxpayers a filing frequency of annual,
quarterly, or monthly. For an estimated
126,000 of the smallest businesses, that
tax filing deadline for annual filing was
Jan. 31 under state law, a date by which
many independent contractors did not yet
have 1099 forms, resulting in late penalties
or the need to request filing extensions.
This bill, sponsored by Rep. Luanne Van
Werven, R-Lynden, changes the f iling
deadline to April 15. AWB supported this
bill as promoting taxpayer fairness and
administrative simplicity.
SSB 5581
marketplace fairness/
wayfair
Passed/AWB Neutral
The Department of Revenue proposed
legislation to clean up online marketplace
sa les t a x st at utes follow i ng t he U. S.
Supreme Court decision in South Dakota
v. Wayfair (2018). Sen. Christine Rolfes,
D-Bainbridge Island, sponsored this “fix
bill” which beca me a broader vehicle
to address tax nexus not just for sales
ta x collection obligations but also for
purposes of imposing B&O tax on out-of-
state businesses. The bill aligned nexus
t h reshold s for B & O a nd sa les t a x at
$100,000, and eliminated a transaction