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Published on Friday, April 5, 2013

Telecommunications tax parity bill

This morning, the House Appropriations Committee heard HB 1971, which removes the sales tax exemption for all residential phone lines, requires retailers to collect E911 taxes on prepaid wireless phones, and makes a number of other changes related to telecommunications. We previously wrote about this bill, which addresses the issues raised in the 2011 Sprint Spectrum v. Washington State Department of Revenue case and has significant financial implications for the state and local governments.

For state fiscal years 2013–2015, new estimates indicate the measure would generate $33.1 million for the state general fund and $15 million for local governments, including $5 million for cities. These amounts are estimated to double in future biennia.

If the Legislature does not pass a bill and a court requires the state to issue sales tax refunds, the impact is estimated at $674.1 million for the state and $249.5 million for local governments.

Categories: Budget & finance