Today the state House of Representatives unveiled its version of tax increases, closing tax “loopholes” and limiting or eliminating certain tax exemptions. The House plans to adopt the governor’s ideas for adding sales tax to candy, gum, soda and bottled water and adds to that list elective cosmetic surgery, janitorial services and custom software.
Like the state Senate package, the House adds a $1 tax on each pack of cigarettes. The House also adds a 1.5% B&O tax to the investment earnings of non-financial firms.
The sales tax on custom software is slated to raise $76.5 million for the remainder of the 2009-11 biennium and another $181 million in the 2011-13 biennium.
This will work like the digital products tax in that custom software sellers will now have to charge their Washington based customers sales tax on customized software they sell to them and then remit that sales tax to the state. The B&O tax rate will drop for sellers of custom software from 1.5% to the retail B&O rate of .471%.
State Representative Ross Hunter of Medina, a former Microsoft employee, is the main architect of this package, which can be found in HB 3191, http://apps.leg.wa.gov/billinfo/summary.aspx?bill=3191. A public hearing will held tomorrow morning, Tuesday, March 2, in the House Finance Committee in the John L. O’Brien building on the Capitol campus in Olympia.
If you want to contact Rep. Hunter directly, his e-mail address is hunter.ross@leg.wa.gov (all legislators can be reached by using the naming convention lastname.firstname@leg.wa.gov) http://www.leg.wa.gov/pages/home.aspx. His phone number is (360) 786-7936. If you are concerned about this, do not hesitate to let him know ASAP as this bill will be voted out of the House Finance Committee immediately after the public hearing and be on a fast track to move through the legislature by March 11, the scheduled last day of the legislative session.
The House package, unlike the Senate does not include a general sales tax increase. Apparently polling shows a high distaste by citizens for a sales tax increase but much less opposition to selected tax increases, removal of exemptions and closing of “loopholes”.
If you have any questions or concerns, please contact WTIA at Lmcmurran@washingtontechnology.org.