Tuesday was the last day for Governor Gregoire to sign bills into law.  The governor has 20 days from the end of the legislative session, not including Sundays, to sign bills into law.  If the governor takes no action, bills automatically become law.

Unless otherwise stated specifically in legislation, laws take effect 90 days after the legislative session, which is July 26 this year.

On Monday, Governor Gregoire signed into law Engrossed Substitute House Bill 2075, the bill relating to taxation of digital goods.  WTIA worked on this issue with a wide range of interests for a year and a half.  Numerous blog posts have been devoted to discussing this legislation.  Here is a link to the page on the legislature's website where you can find the legislation itself, bill reports and history.  http://apps.leg.wa.gov/billinfo/summary.aspx?bill=2075

This bill lowers the B&O tax for sellers of digital goods while requiring the assessing, collecting and remitting of sales tax for sales of digital goods.  We strongly recommend that anyone who is in the business of selling video games, ringtones, music, movies and services online read this legislation thoroughly as it will require sellers of digital goods to source the sales tax to the location of your customers in Washington state.  You will not charge sales tax to customers out of state, which is likely where most of them are.

There are also a number of exemptions in the bill for certain types of online items, such as educational materials and travel services.  Some digital goods purchased by business are also exempt from sales tax. 

Governor Gregoire signed Engrossed Substitute House Bill 2261 into law on Tuesday.  This is the redefinition of "basic education" that includes a 24 credit requirement to graduate from high school.  The legislation sets a new allocation formula for schools, which will require higher levels of funding over the next few years.  It calls for a new system of data collection for students and schools to be able to track progess of students throughout their K-12 journey.  There are many other provisions in this legislation.  A summary of the new law is attached. 

This was a huge victory for parents and school activists over the entrenched teacher's union, the only major group to oppose this bill.  It took some real backbone by legislators to stand up to the threats by the WEA, the largest teacher's union in the state.  However, many, many teachers will benefit from this--the good ones who care about student learning.

On Tuesday, Gov. Gregoire also signed into law the state operating budget, Engrossed Substitute House Bill 1244, http://apps.leg.wa.gov/billinfo/summary.aspx?bill=1244&year=2009.  The Senate Ways and Means Committee has summary documents at their web page, http://www.leg.wa.gov/Senate/Committees/WM/ if you want to read detailed information about the state budget, where cuts were made and what was funded.  The down economy has taken a toll on tax revenue and every state agency and area of state government got hit.

Math and science programs at the K-12 level were cut, higher education got squeezed badly, enrollments on the state basic health plan were cut along with social/human services, natural resources/environment, corrections, economic development, etc.  The state rainy day fund was tapped to cover the shortfall and funds from capital accounts were raided to fund the operating budget.  Hopefully the legislature will be more circumspect when the economy improves when increasing spending or expanding programs and eligibility, which is what got us into trouble in the first place.

Please contact us at Lmcmurran@washingtontechnology.org if you have questions, want to know about specific legislation or want to get involved.