AWC Legislative Bulletin - Volume 31, No. 4
February 1, 2008  (Plain Text Version)

Return to Graphical Version | Search back issues

In this issue:
What You Need to Know Now
From the Director: Governor Gregoire and Legislative Leaders Address CLAC Attendees
Energy & Telecommunications
General Local Government
Infrastructure, Transportation & Economic Development
Land Use & Housing
Law & Justice
Municipal Finance
Personnel & Labor Relations
Online Legislative Advocacy Tools
AWC Legislative Contacts & Officers

Municipal Finance

City Business Licenses & SST (HB 3126)

AWC has been working with the business community to allay concerns that the reporting requirements of the streamlined sales tax (SST) will result in additional licensing or tax obligations for businesses whose sales involve deliveries. This legislation clarifies that mere registration or compliance with SST does not result in nexus for license or tax purposes. AWC supports this legislation, HB 3126, which will be heard by the House Finance Committee on Tuesday, February 5, at 10 am.

AWC is also working with the business community on a model letter that cities can use to explain the license requirements to businesses that deliver goods into their jurisdictions.

AWC would oppose limits on local authority to license and regulate businesses that seek to expand this clarification beyond this limited application.

Business Assistance for SST Implementation (HB 2380)

This legislation would expand the assistance approved in SSB 5089 last session for businesses to implement the destination-based sourcing provisions of SST. HB 2380 passed the House on January 30. AWC supports this bill and an additional limited expansion of the state tax credit the Senate will consider. We want to ensure businesses adopt destination sourcing accurately and on-time.

City B&O Taxes – Definition of Customer Location for Service Apportionment (HB 3244/SB 6894)

One of the changes the 38 cities with local business & occupation taxes just implemented effective January 1, 2008, to comply with RCW 35.102.130; required cities to adopt allocation and apportionment provisions including a two-factor formula for apportionment of service and other income. AWC has never believed that the allocation provisions mandated in the 2003 legislation are workable. We met with the business community over the summer to determine the meaning of some of the terms required for apportionment but were unable to reach agreement on all of the required changes.

HB 3244 is being advanced by the business community given their disagreement with how we defined customer location in the model ordinance. The bill will be heard by the House Finance Committee on Tuesday, February 5, at 10 am. We will oppose this bill.

This legislation would make a change to one of the three options available to business for calculating the service-income factor in the formula. It would provide a three-part test for determining the customer location, which is used to determine where the majority of contacts with customers occur for the service income factor: the billing address of the customer, the office location of the taxpayer, or another location where there is "clear and convincing evidence" that the taxpayer submitted an address to avoid taxation. It is unclear how these defaults would operate in conjunction with the other two options for the service income factor.

Given the frequency in which third parties are used to process billing for entities, AWC does not believe this interpretation of customer location is workable as an accurate representation of where service-income activity occurs.

Lodging Tax Economic Impact Report (HB 3206/SB 6796)

SB 6796 is scheduled for public hearing by the Senate Committee on Economic Development on Tuesday, February 5 at 10 am. HB 3206 was heard by the House Committee on Community & Economic Development & Trade on Thursday, January 31.

As noted in last week’s Bulletin these bills would clarify the reporting requirements for all cities implementing the lodging tax. They would:

  • Require local jurisdictions expending lodging tax revenues on their own tourism-related facilities to complete the economic impact report;
  • Eliminate the reporting requirement of the estimated increase in sales and use tax revenues attributable to the special event, festival or tourism-related facility; and
  • Clarify that reporting would begin with calendar year 2008.

AWC testified in support of this bill as we ensure complete data to the Legislature in 2012 and our efforts in 2013 when we will seek elimination of the sunset clause included in last year’s bill providing us additional flexibility regarding the use of the hotel motel tax.

Concerning Property Tax Statements (HB 3140)

This bill is scheduled for public hearing by the House Committee on Finance at 8 pm on Monday, February 4. The bill would require that tax statements show the amount of the regular levy by taxing district and excess levy by taxing district.

Property Tax Bills in Senate Ways & Means (SB 6706/HB 2611)

On Thursday, February 7 at 1:30 pm the Senate Ways & Means Committee will hold a public hearing on a number of different property tax bills. One bill of interest to cities is SB 6706, which would require all counties to conduct annual revaluations of property by January 2012. This bill’s companion, HB 2611, was heard by the House Finance Committee on January 25 (see the January 18 Bulletin for more information).

Other bills scheduled for public hearing include:

  • Providing a homestead exemption of up to $100,000 (SB 6565, SJR 8226);
  • Setting base years for property tax valuation and limiting property tax valuation increases (SB 6586, SJR 8222); and
  • Providing assistance for low-income homeowners, seniors and disabled homeowners (SB 6320, SB 6477, SB 6557).