New Sales Tax Hits Hard, Causing Confusion and Legal Challenges

Businesses across the state are feeling the brunt of far-reaching new taxes on business services such as information technology, website development, security, temporary staffing, advertising, and software. Even nonprofit associations like the Spokane Home Builders Association will have to start charging taxes on certain live events.

While companies like Comcast are suing over the legality of the increases, small businesses are much less able to fight back. And although the Department of Revenue is "still reviewing other rules and guidance documents", companies are expected to implement these taxes. Washington State already ranks last in the nation for business closures, with a first-year failure rate of 40.8% compared to the national average of 23.2%. These tax increases will make it worse.

Even The Seattle Times editorial board called the taxes hastily passed, criticizing not only the dismal result, but the lack of a good process. Despite increasing tax revenues, the legislature still passed the largest tax increase in state history in the middle of a cost-of-living and housing affordability crisis.

Not only should this law be repealed, but the legislature ought to look at ways to make Washington's business climate more fair, competitive, and predictable. While there's a lot of work to do, we can't do it without your voice. Learn more about SHBA's upcoming legislative priorities on this and other housing-related policy by reaching out to Isaiah at ipaine@shba.com, and stay tuned for opportunities at the beginning of next year to track legislation and visit Olympia to bring business and builder issues to the forefront.