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Published on Friday, June 2, 2017

Internet sales – city impacts of State Marketplace Fairness Act

One of the provisions that cities support in the revenue proposals HB 2186 and SB 5929 is a state version of the Marketplace Fairness Act requiring sales tax collections or reporting of customers for use taxes by internet retailers. Cities support these changes to help level the playing field between local brick and mortar businesses and out-of-state internet retailers in sales tax collections, a long-standing legislative priority for cities.

This state version of Marketplace Fairness appears to have a lot of interest. We expect that it is part of the negotiations currently underway to reach a final budget agreement by the end of the state’s fiscal year June 30.

Updating sales tax collections to reflect the growing reliance on internet sales makes sense in Washington, where sales tax account for almost 50 percent of state revenues in the operating budget.

To see projections for your city if the proposal passes, visit the data view here, and click the arrow to choose your city from the list.

AWC does not support the proposal in the House budget to end Streamlined Sales Tax mitigation beginning in 2019 to cities impacted by the change to destination based sourcing. The state should uphold the deal made in 2007 to provide mitigation to impacted jurisdictions.

See this mailer for more information on AWC’s positions on other provisions of the budget and revenue proposals currently under negotiation.

Categories: Budget & finance