Streamlined Sales Tax and Telecommunication Taxes

Streamlined Sales Tax legislation, SSB 5089, resulted in some changes to the definitions of telecommunications in the state’s tax statutes (RCW 82.04.065). Because some cities reference these definitions in their local utility tax ordinances, the old definitions were moved to another section related to the state utility tax statutes (RCW 82.14.010) so that those city taxes would remain unaffected by the state definition changes. Those cities that adopted definitions by reference in their telecommunications utility tax ordinances should prepare to update the reference to the new section in order to comply with the new state definitions, which go into effect on July 1, 2008. Those cities that have not adopted definitions by reference to the state law will not be impacted by these changes.

Model B&O Tax Ordinance Update

Legislation approved in 2003 requires cities to adopt changes to the B&O tax model ordinance to include allocation and apportionment provisions that take effect on January 1, 2008 (RCW 35.102). AWC has been working with a group of cities to revise the model ordinance and is in the process of consulting the business community for comments on the revisions. We expect to have the ordinance available for cities to adopt this fall and plan to host some education sessions this fall for finance directors and attorneys in B&O tax cities that will be required to amend their B&O tax ordinances by the January 1, 2008 deadline.

As part of the 2008 budget process, those cities with B&O taxes should also review the conclusions of the 2005 Department of Revenue Apportionment Study and begin planning for anticipated revenue impacts due to these changes to local B&O taxes. Please contact Jim Justin, jimj@awcnet.org, or Sheila Gall, sheilag@awcnet.org, if you have any questions on this issue.

Department of Revenue Local Government Website Portal

The Department of Revenue (DOR) held its first meeting on August 6 of a work group to assist in developing a new section on DOR’s website specifically for local governments. At the meeting, DOR reviewed some improvements it has recently made to the searchable report feature for local tax data (http://dor.wa.gov/content/aboutus/statisticsandreports/TID/StatisticsReports.aspx?query=property) and brainstormed some ideas for what should be included on a local government site.

If your city is interested in participating in this project or has ideas regarding what should be included on the local website, please contact Miki Gearhart at DOR, mikig@dor.wa.gov, or Sheila Gall of AWC, sheilag@awcnet.org.

JLARC Ambulance Utility Study

The Joint Legislative Audit and Review Committee (JLARC) is in the process of conducting a legislatively mandated study regarding the funding of emergency medical services and city use of ambulance utilities, as required by ESHB 1635, passed in 2005 (RCW 35.21.766). AWC sent out JLARC’s survey for the study to city finance directors and clerks earlier this month, and we encourage your city to respond to the survey if you have not already done so. If you have any questions regarding the survey, please contact Nina Oman, Research Analyst, JLARC, at oman.nina@leg.wa.gov.

JLARC will be discussing the progress of the study at a meeting on August 23 at 10 am in Olympia, and the study is required to be completed by the end of the year.

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