HomeMy WebLinkAboutPark 2012-11-20 Item 5G - Sales Tax on Recreation FeesTO:
FROM:
DATE:
SUBJECT:
MEMORANDUM
Sales Tax Distribution by Government Entity
SALES TAX ON RECREATION FEES
Source: City of Tukwila 2011 -2012 Biennial Budget
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12424 42nd Ave. S. Tukwila, Washington 98168 Phone: 206 -768 -2822 Fax: 206 768 -0524
Parks Recreation Department
Tukwila Parks Commission
Dave Johnson, Recreation Superintendent
November 13, 2012
IM
R
Washington State Department of Revenue (DOR) has recently provided further clarification to
municipalities and the Washington Recreation and Park Association (WRPA) surrounding Washington
Administrative Code 458 -20 -183 related to amusement, recreation, and physical fitness activities and
the sales tax and B &O tax charged to such activities. This issue was first raised a few years ago during a
scheduled DOR audit in another City, where DOR was claiming to collect sales tax revenue from League
Fees which that City charged. Since DOR hadn't been collecting this sales tax in the past, this caused
municipalities across the state to further examine the issue.
To assure our compliance, we have worked diligently with DOR, WRPA, and staff in our City's Finance
Department to gain further clarification on this complicated issue. We are now charging retail sales tax
on the appropriate "amusement, recreation, and physical fitness activities In some cases, this will
increase the fee the participant pays for that activity. In an effort to eliminate surprises for the
participant, we have included the sales tax into the advertised fee and have noted that fees include all
applicable taxes. We have also taken internal steps to ease the accounting and reporting processes.
The sales tax rate in the City of Tukwila is the state allowable 9.5% on retail goods, with an additional
0.5% tax on food and beverages sold in restaurants, bars and taverns, and to car sales to help pay for
statewide transportation improvements. The chart below summarizes how the 9.5% tax collected is
divided between various governmental entities.
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9
Percent
Percent of Total
Washington State
6.50%
68.42%
King County Public Transportation Benefit Area
0.90%
9.47%
City of Tukwila
0.85%
8.95%
Regional Transit Authority
0.80%
8.42%
King County
0.35%
3.68%
King County Criminal Justice
0.10%
1.05%
T OTAL
9.50%
100.00%
SALES TAX ON RECREATION FEES
Source: City of Tukwila 2011 -2012 Biennial Budget
r,,,.. ,h
12424 42nd Ave. S. Tukwila, Washington 98168 Phone: 206 -768 -2822 Fax: 206 768 -0524
Parks Recreation Department
Tukwila Parks Commission
Dave Johnson, Recreation Superintendent
November 13, 2012
IM
R
Washington State Department of Revenue (DOR) has recently provided further clarification to
municipalities and the Washington Recreation and Park Association (WRPA) surrounding Washington
Administrative Code 458 -20 -183 related to amusement, recreation, and physical fitness activities and
the sales tax and B &O tax charged to such activities. This issue was first raised a few years ago during a
scheduled DOR audit in another City, where DOR was claiming to collect sales tax revenue from League
Fees which that City charged. Since DOR hadn't been collecting this sales tax in the past, this caused
municipalities across the state to further examine the issue.
To assure our compliance, we have worked diligently with DOR, WRPA, and staff in our City's Finance
Department to gain further clarification on this complicated issue. We are now charging retail sales tax
on the appropriate "amusement, recreation, and physical fitness activities In some cases, this will
increase the fee the participant pays for that activity. In an effort to eliminate surprises for the
participant, we have included the sales tax into the advertised fee and have noted that fees include all
applicable taxes. We have also taken internal steps to ease the accounting and reporting processes.
The sales tax rate in the City of Tukwila is the state allowable 9.5% on retail goods, with an additional
0.5% tax on food and beverages sold in restaurants, bars and taverns, and to car sales to help pay for
statewide transportation improvements. The chart below summarizes how the 9.5% tax collected is
divided between various governmental entities.
r,
9