HomeMy WebLinkAboutFIN 2019-02-11 Item 2C - Update - Sales Tax MitigationCity of Tukwila
INFOR ATIONAL E ORANDU
TO:
FROM: Peggy McCarthy, Finance Director
CC: Mayor Ekberg
DATE: February 6, 2019
SUBJECT: Sales Tax Mitigation Update
ISSUE
Provide an update on sales tax mitigation payments and offsets.
BACKGROUND
When the State moved to destination -based sales tax in 2008, referred to as streamlined sales tax
or SST, it was determined that those cities sustaining a negative financial impact from this legislation,
including the City of Tukwila, would receive mitigation funds from the State. In 2018, State legislation
was enacted to end the payment of these mitigation funds effective after the September 2019
payment. The City receives approximately $288 thousand quarterly or $1.15 million annually in state
streamlined sales tax mitigation funds. Another piece of legislation, the Washington State
Marketplace Fairness Act, became effective January 1, 2018 and requires remote sellers and other
entities that meet certain statutory criteria to collect and remit sales or use tax.
Allan Ekberg, Mayor
Finance Committee
DISCUSSION
The potential increased sales tax collections from online businesses has served as one of the State's
justifications for eliminating the SST mitigation funds. However, the collections from voluntary
remitters and from the Marketplace Fairness Act for the City of Tukwila have been a fraction of the
mitigation payments, as illustrated in the schedule below.
Offsets to Sales Tax Mitigation Payments Sales Tax Net
Collection Rec'd By Voluntary Marketplace TOTAL (a) Mitigation Mitigation
Qtr City Fairness Act Allocation Rec'd
Q12018 Jun 2018 $ 11,576 $ 16,584 $ 28,160 10% $ 287,346 $ 259,185
Q2 2018 Sep 2018 16,777 21,172 37,948 13% 287,346 249,397
Q3 2018 Dec 2018 18,605 24,050 42,656 15% 287,346 244,690
Q4 2018 Mar 2019
estimate 20,000 30,000 50,000 17% 287,346 237,346
TOTAL $ 66,958 $ 91,806 $ 158,764 $ 1,149, 382 $ 990,618
(a) Offsets as a percentage of mitigation allocation.
The City has been involved in lobbying efforts recommending to the Washington State Legislature
that streamlined sales tax mitigation payments continue to be funded for those cities that have not
yet received adequate WA Marketplace Fairness Act and voluntary compliance revenue to offset the
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INFORMATIONAL MEMO
Page 2
loss of streamlined sales tax mitigation payments. For more information on these efforts, a letter
sent to the Washington State Department of Revenue by the Streamlined Sales Tax Mitigation
Executive Committee on August 31, 2018 is attached to this memo.
RECOMMENDATION
Presentation is for information only.
ATTACHMENTS
SST Mitigation Committee Cover letter and Report
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OFIWA GT N
August31, 2018
Mc David Duvall
Legislative Liaison
Washington State Department ofRevenue
POBox 4745O
Olympia, Washington 98504-7450
Re: SSIB 5883 Streamlined Sales Tax Report
Dear Mr. Duvall:
Onbehalf ofthe SST Mitigation Executive Committee, |amsubmitting the Qroup'sreport and
recommendation. VVerespectfully request the report beincluded asan appendix tothe Department nf
Revenue (DOR) report on impacts by the State's implementation of Marketplace Fairness, required by
SS8SO83 Sec. 136 (3), as agreed to by DORond cities.
The SST Mitigation Executive Committee included representatives ofcities, the business community,
ports, the Washington State Department ofCommerce, and legislative staff.
The Committee recommends that the Washington State Legislature should continue to fund streamlined
sales tax mitigation payments for the limited number of cities that have not yet received adequate WA
Marketplace Fairness Act and voluntary compliance revenue to offset the loss of streamlined sales tax
mitigation payments. Ongoing data onthe VVAMarketplace Fairness Act and voluntary compliance
revenue collections in comparison to streamlined sales tax mitigation payments should inform the
continuation ofstreamlined sales tax mitigation payments in future biennia.
We look forward to the Department of Revenue's final report. We believe this report meets the goals of
the proviso inSec. 138(3)ofGGQS8O]and the report addresses this important policy tool for sales tax
fairness.
Sincerely,
Peter8. King
Chief Executive Officer
[c: VlkNSmith, Director, Department ofRevenue
Victoria Lincoln, AVVC co-chair of Executive Committee
Derek Matheson, City ofKent, co-chair ufExecutive Committee
3607534137 ,A00,562-A9A1 'yyac't`e5OFO
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Prepared by the SST Mitigation Executive Cornmittee
August 31, 2018
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SSB 5883 Streamlines Sales Tax Report August 31, 2018
Executive Summary
This report was prepared in response to 2017-19 Operating Budget, SSB 5883, Sec. 136(3) directing the
Department of Revenue (DOR) to evaluate sections 201-213 of EHB 2163 signed into law in the 2017
legislative session.
The SST Mitigation Executive Committee met between December 2017 and August 2018 and agreed to a
single recommendation:
o The Washington State Legislature should continue to fund streamlined sales tax mitigation
payments for the limited number of cities that have not yet received adequate WA Marketplace
Fairness Act and voluntary compliance revenue to offset the loss of streamlined sales tax
mitigation payments. Ongoing data on the WA Marketplace Fairness Act and voluntary
compliance revenue collections in comparison to streamlined sales tax mitigation payments
should inform the continuation of streamlined sales tax mitigation payments in future biennia.
The Committee looked at and did not approve four other options:
1. Expand existing tax authority;
2. Provide new tax authority;
3. Reset Land Use (rezoning); and
4. No action.
Overview
The study in Sec. 136(3) of SSB 5883 directed DOR to examine and report back on two core issues:
o Analysis of revenue gains under remote sales tax fairness vis-a-vis SST Mitigation; and
o Consideration of online sales and streamlined sales tax mitigation trends for areas with a
significant concentration of warehousing distribution and manufacturing centers.
The SST Mitigation Executive Committee felt the study, ofthe second core issue as stated above, should
involve a review of the impacts and how to best address them. DOR believed the cities would be better
positioned to lead this portion of the study, and DOR would include the cities' recommendations in the
report.
The city -convened workgroup, which became the SST Mitigation Executive Committee, consisted of:
o Cities;
o Association of Washington Cities and other city representatives;
o Chamber of Commerce; and
o Ports of Seattle and Tacoma.
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SSB 5883 Streamlines Sales Tax Report August 31, 2018
The Committee reviewed:
o What is at stake in the most affected communities;
o History;
o Legal challenges;
o What other states are doing; and
o Alternatives for moving forward.
In making its recommendations, and selecting mitigation payments as the preferred option, the SST
Mitigation Executive Committee relied on the following guiding policy principles:
1) Valuing the economic model that makes Washington a critical player in international trade,
manufacturing, warehousing, and the location of distribution centers;
2) Ensuring local jurisdictions can continue to make land use, zoning, infrastructure investment,
and economic development planning decisions that support this model;
3) Attempting to hold local communities harmless, to the maximum extent practical. Local
communities built around a previous, origin -based -sourcing model of local sales tax were simply
living by and following the rules put in place by the State of Washington;
4) Attempting to minimize unfair or disproportionate tax burdens on businesses that have followed
those same rules and had nothing to do with the tax -policy decision made by the state;
5) Recognizing that local elected officials should not be asked to disproportionately bear the
burden of a fundamental change in tax policy at the state level;
6) Asking the State of Washington to continue to follow, and recognize, a system and structure of
Mitigation Payments established under SSB 5089, Laws of 2007 — one that is, in fact, working as
intended.
Recommendation: Continue Limited Mitigation
The SST Mitigation Executive Committee met between December 2017 and August 2018 and agreed to a
single recommendation:
o The Washington State Legislature should continue to fund streamlined sales tax mitigation
payments for the limited number of cities that have not yet received adequate WA Marketplace
Fairness Act and voluntary compliance revenue to offset the loss of streamlined sales tax
mitigation payments. Ongoing data on the WA Marketplace Fairness Act and voluntary
compliance revenue collections in comparison to streamlined sales tax mitigation payments
should inform the continuation of streamlined sales tax mitigation payments in future biennia.
The Committee looked at and did not approve four other options:
1. Expand existing tax authority;
2. Provide new tax authority;
3. Re -set Land Use (rezoning); and
4. No action.
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SSB 5883 Streamlines Sales Tax Report August 31, 2018
SST Mitigation Executive Committee Membership
The Committee membership included members from the affected cities and business community,
The Northwest Sea Port Alliance. The Association of Washington Cities and the City ofKent served
as co-chairs. See Exhibit A for complete list of committee members.
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Introduction
What is at Stake
Washington State's economy relies significantly on trade, which is facilitated by the warehousing
distribution and manufacturing centers in the impacted cities. According to the March 2015 PSRC
Industrial Lands Report, the Puget Sound regional industrial land area serves as a significant economic
engine for the regional and state economy.
o 28,615 net acres of industrial -zoned and designated lands spread across four counties, 65
jurisdictions, and military and tribal lands;
o In 2012, total wages paid out by industrial activities on industrial lands were $24.4 billion, or
23.2 percent of all wages paid out in the region in 2012;
o Estimated state tax revenues generated by industrial activities on industrial lands totaled over
$2.25 billion in 2012;
o Kent -Renton Subarea Profile;
o 5,970 acres (8 percent of Region's Industrial Land)
o 49,300 industrial jobs (10 percent of Region's jobs)
o 14,500 non -industrial jobs
o Ownership by parcel area (Private — 91 percent; Public — 9 percent)
o Average parcel size is 4.2 acres.
o Specialization— Aerospace, Wholesaling, and Transportation Distribution and Logistics
(TDL)
The PRSC report also included estimated 2012 sales tax gains and losses for 10 selected cities in the
Puget Sound area attributed to the change in sourcing. These estimates were compiled based on
information provided by the Washington State Department of Revenue, the Association of Washington
Cities, and Community Attributes, Inc.
The estimated loss for the City of Kent was $12.7 million. The City of Kent' s FY 2017 SST Mitigation
payments only represent approximately $4.9 million, or 39 percent, of the actual estimated sourcing
losses experienced by the City. This report also reflected the following:
o A significant sourcing loss for one city which did not receive any SST mitigation
o A significant sourcing gain for two cities which received SST mitigation
o FY 2017 SST mitigation payments exceeding sourcing losses for one city
The Committee believes that these three observations reflect potential errors with respect to estimated
2012 sourcing losses rather than in the calculation of FY 2017 mitigation payments based on the
following:
o Pursuant to RCW 82.14.500, the Department of Revenue determined sourcing losses by
analyzing and comparing data from tax return information and tax collections for each local
taxing jurisdiction before and after July 1, 2008, on a calendar quarter basis. This was an
extensive process involving review and input by each respective mitigated jurisdiction.
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SSB 5883 Streamlines Sales Tax Report August 31, 2018
These measurements were made during the trough of the Great Recession and were not
adjusted for subsequent recovery, growth and potential expansion of manufacturing,
warehousing and distribution activities within the mitigated jurisdictions. Therefore, the
expectation is that the actual sourcing losses would increase during periods subsequent to July
1, 2008.
Therefore, the Committee felt that anomalies with respect to 2012 sourcing loss estimates included in
this report do not diminish the expectation that mitigation payments received are less than the actual
sourcing losses experienced by the mitigated cities included in this report.
Prior to the implementation of streamlined sales tax in 2008, jurisdictions received sales tax revenue as
general fund revenue. When streamlined sales tax mitigation payments began, many jurisdictions used
the mitigation payments to backfill the loss of general fund revenues. Some of the largest receivers of
streamlined sales tax mitigation payments continue to allocate this funding to their general fund to
provide basic services, including law enforcement services. For these jurisdictions, eliminating these
payments could result in a significant impact on city services and a need to replace general fund
revenues.
History
In the 1992 Quill Corp. v. North Dakota decision the U.S. Supreme Court held that states cannot require
retailers with no in -state physical presence (nexus) to collect and remit sales and use tax. The U.S.
Congress did not respond by passing legislation to give authority to require collection to states. In
response, in 2000, a number of states and stakeholders formed the Streamlined Sales and Use Tax
Project which was designed to simplify, modernize and standardize sales and use tax laws, definitions,
and practices.
In 2002, a collection of states formed the Streamlined Sales and Use Tax Agreement (SSUTA). The
agreement would become effective when 10 states representing at least 20 percent of the population
became substantially compliant. One of the main components of SSUTA was to make the "sourcing" of
sales tax based on the final destination of the product. This was at odds with half the states, including
Washington, that used an origin -based system.
In 2003, the Washington State Legislature adopted SB 5783, directing the Department of Revenue to
undertake a comprehensive study on the impacts of the sourcing change. DOR' s study found that 120
cities, counties, transit agencies, and Public Facility Districts would be negatively impacted by the change
in sourcing.
In 2006, a compromise was made between the jurisdictions that would be negatively impacted with
those that would be positively impacted. The resulting compromise was enacted in SSB 5089 and signed
into law in 2007 with the promise of the legislature funding full mitigation. Mitigation was a critical step
to the upkeeping of warehousing, distribution centers, and industrial areas throughout the state. The
mitigation strategy was designed to provide payments until such a time as the gains met or exceeded the
losses due to the sourcing change.
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SSB 5883 Streamlines Sales Tax Report August 31, 2018
Legal Issues and Challenges
The passage of SSB 5089 was intended as a step in implementing sales tax collection requirements on
internet sales. Under the national agreement, companies could "voluntarily" collect sales tax on behalf
of the member states. If companies chose to "voluntarily" comply they would receive in return: 1)
vendor compensation or financial assistance in the costs of collection; and 2) liability protection against
back taxes in the event the state came under legal question.
The negatively -impacted jurisdictions were hit particularly hard. The Legislature began appropriating
approximately $50 million per biennium in streamlined sales tax mitigation based on 2008 estimates.
The actual amount of mitigation was determined by actual loss of sales and use tax, reduced by
voluntary compliance. If the Legislature acted on requiring internet retailers to collect and remit sales
and use tax, the additional tax collection would be attributed to mitigation.
As of 2017, there were 57 jurisdictions, including 49 cities, receiving mitigation. Initial revenue estimates
resulting from new sales tax collections provided by EHB 2163 indicate that at least 11 cities receiving
mitigation will be at a loss when attributing the new revenue source to the mitigation calculation.
The Washington State law was based on a case involving Colorado information reporting requirements,
Direct Marketing Association v. Brohl, that provides thatthe individual taxpayer is responsible for paying
tax directly to the jurisdiction or through the intermediary. If the intermediary does not collect and
remit the tax then they would be required to report sales and amount due to the taxing authority. In the
concurring statement, Justice Kennedy wrote "the legal system should find an appropriate case for this
Court to reexamine Quill."
The U.S. Supreme Court accepted a legal challenge to Quill, South Dakota v. Wayfair, heard in April
2018. The challenge is whether a seller without a physical presence is required to collect and remit
taxes. The ruling in Brohl allows for jurisdictions that have destination -based taxes to collect taxes from
either voluntary compliance from sellers or mandatory compliance from payers.
On June 21, 2018 in South Dakota v. Wayfair, Inc., the U.S. Supreme Court reversed the Quill
Corporation v. North Dakota (No. 91-194) decision which required that retailers have a physical
presence in the state in order for the state to require collection and remittance of sales tax.
Review of Other States
The Committee reviewed options that other states implemented in response to changes in sales tax.
Each state was guided by the relationship between the cities and state and cities' local authority.
Washington's heavy dependence on sales tax limited the options and increased impacts on local
governments. Most states took one of three actions: 1) increased taxes at the state level; 2) closed tax
loopholes; or 3) provided authority, if the authority did not already exist, to the local level to increase
taxes.
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SSB 5883 Streamlines Sales Tax Report August 31, 2018
Minnesota:
o Cities have authority to raise local taxes;
o Raise the local portion of the base [example .005 to .006.]
o Created new classes of taxable items
o Added candy
o Closed loopholes
Alabama:
o Multi -tier tax system
o Sales
o Business
o Corporate Income
o Chose to increase base rates such as capital gains and utilities
California:
o Cities have a base rate of 1 percent and can raise to 2 percent;
o City option
o Changed nexus standards to tax servers
Arkansas:
o Raised taxes.
o Sales and Use
o Income
o Gross receipts [similar to Washington's B&O]
Georgia:
o Allows for taxes on items intended for resale
o This allows for items to be taxed at the warehouse.
o Multi -tier tax system
o Capital gains
o Personal income
o Sales tax
o Excise tax
o Corporate income tax
o Property tax
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SSB 5883 Streamlines Sales Tax Report August 31, 2018
Discussion Topics & Process
As stated in the charter (Appendix A), the SST Mitigation Executive Committee determined it would
meet the requirements of SSB 5583 Sec. 136(3) by discussing the following topics:
o What is at stake for the communities most affected;
o History;
o Legal issues and challenges; and
o How have other states reacted.
The Committee agreed to approach each topic:
o With a member presentation;
o Discussion of topic to evaluate advantages and/or challenges; and
o Develop options or recommendations by consensus, if poss ible and by a majority with a
minority report on select topics if a consensus could not be reached.
SST Mitigation Executive Committee Recommendation and Alternative Options
The SST Mitigation Executive Committee members felt strongly that the State should continue to fund
streamlined sales tax mitigation payments for the limited number of cities that have not yet received
adequate WA Marketplace Fairness Act and voluntary compliance revenue to offset the loss of
streamlined sales tax mitigation payments. Ongoing data on the WA Marketplace Fairness Act and
voluntary compliance revenue collections in comparison to streamlined sales tax mitigation payments
should inform the continuation of streamlined sales tax mitigation payments in future biennia.
Committee members noted that this option would not require additional legislation.
1) The State of Washington made this policy decision in the best interest of the state, recognizing
there was an obligation to assist impacted local governments. The State should continue to
uphold the original agreement until local governments can recover their losses through
increased sales tax collections.
2) The number of jurisdictions needing mitigation continues to drop. The initial study of SST
destination -based -sourcing by the Department of Revenue projected that as many as 120 cities,
counties, transit agencies, and Public Facility Districts would experience adverse fiscal impacts.
The actual number of mitigated jurisdictions was 86 in 2009, had narrowed to 57 in the first
quarter of 2017, and then compressed even further with the projected remote sales tax revenue
projections under EHB 2163 —to 11 jurisdictions. Initial revenue collections indicate that some
of those 11 may no longer need mitigation payments, or may not need them for more than a
biennium or two. There were 26 jurisdictions (all cities) that collectively received $2.5 million on
June 29, 2018, representing the first mitigation payment incorporating WA Marketplace Fairness
Act revenues. This included 10 cities that each received at least $20,000 for a collective total of
$2.4 million.
3) A general fund allocation continues to help the dwindling number of adversely -impacted
jurisdictions cope with the aftereffects of SST and destination -based sourcing, without placing
new burdens on businesses, ports, truckers/shippers, industrial office properties, etc.
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4) A general fund allocation helps local jurisdictions, counties, regions and the entire State of
Washington continue to support a land use and economic development model built over
decades. That economic model relies heavily on international trade and entire complexes of
manufacturing, warehousing, and distribution centers that support farm -to -market product
movements, shipping and trucking of goods, port imports/exports, etc.
In making its recommendations, and selecting mitigation payments as the preferred option, the SST
Mitigation Executive Committee relied on the following guiding policy principles:
1) Valuing the economic model that makes Washington a critical player in international trade,
manufacturing, warehousing, and the location of distribution centers;
2) Ensuring local jurisdictions can continue to make land use, zoning, infrastructure investment,
and economic development planning decisions that support this model;
3) Attempting to hold local communities harmless, to the maximum extent practical. Local
communities built around a previous, origin -based -sourcing model of local sales tax were simply
living by and following the rules put in place by the State of Washington;
4) Attempting to minimize unfair or disproportionate tax burdens on businesses that have followed
those same rules and had nothing to do with the tax -policy decision made by the state;
5) Recognizing that local elected officials should not be asked to disproportionately bear the
burden of a fundamental change in tax policy at the state level;
6) Asking the State of Washington to continue to follow, and recognize, a system and structure of
Mitigation Payments established under SSB 5089, Laws of 2007 —one that is, in fact, working as
intended.
Continue Some Form of SST Mitigation Payments
SST Mitigation Executive Committee members discussed an option of continuing to mitigate destination -
based -sourcing impacted jurisdictions through the State Operating Budget. Such an option could be
structured either as a budget -cycle -to -budget -cycle mitigation approach, or through a statutory
mechanism utilizing the State Operating Budget.
The option to utilize the State Operating Budget would involve a state sales tax credit mechanism. It
would require legislation and would further require a majority of the Legislature to see the benefits of
such legislation. A state sales tax credit could be structured in a way that assisted only the remaining
handful of local jurisdictions that continue to be adversely impacted by destination -based sourcing —
even with the arrival of new remote sales tax revenues.
The option to continue SST mitigation payments would not require legislation but would require
impacted jurisdictions and groups allied with them (e.g., ports, NAIOP, Washington Trucking
Association), to mount advocacy efforts annually to keep the Operating Budget mitigation in effect.
While Committee members saw value in having a structural, statutory mechanism such as a state sales
tax credit to address the SST Mitigation issue, there was a concern that such an approach would be
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extremely difficult to enact. It would require many state legislators whose districts are either minimally
affected or not at all affected by the destination -based -sourcing changes to agree to this change.
Expand Existing Taxing Authority Granted to Cities to Cover Ongoing SST Sourcing Losses
The Committee also discussedthe alternative ofaddressing ongoing SST local -sourcing losses by
recommending that certain adversely impacted cities be granted new taxing authority.
One example of a possible expansion in authority cited by Committee members involved the utility tax.
Under current state law, cities are provided with authority to impose a tax of up to 6 percent on three
utilities (natural gas, electricity, telecommunications) — and to go beyond that 6 percent threshold
requires a public vote. There is a "nexus" argument that, since facilities accommodating warehousing,
distribution centers, manufacturing and wholesaling are significant users of utilities, it makes sense to
ask those users to pay a higher level of utility taxes.
The Committee identified several potential benefits of this type of "expand existing taxing authority"
alternative: 1) avoids impact to state general fund; 2) could help keep adversely -impacted local
jurisdictions whole in terms of overall revenues; and 3) a jurisdiction could draw some logical nexus
between the types of businesses being taxed and the application of the tax itself.
However, Committee members also raised several concerns with this alternative which, in the view of
the Committee, outweigh the perceived benefits. These included:
1) Such an alternative would force local jurisdictions to accept tax -policy decisions that place new
burdens on area businesses. Local elected officials who had nothing to do with the local sales tax
sourcing decision in the first place would be asked to play the role of "bad cop";
2) In many cases, new tax burdens would be placed upon some of the most productive and
important industry sectors in a local community — if not the entire state. For example, existing
data shows that the cluster of warehousing distribution and manufacturing facilities in the
Green River Valley comprise 12.5 percent (one -eighth) of the entire state Gross Domestic
Product and are a pivotal component of the international trade that connects Washington's
ports to overseas nations in the Asia -Pacific and throughout the world;
3) Local elected officials pointed out that jurisdictions imposing higher taxes to cover SST sourcing
losses would in effect be paying a "double penalty," first covering for a decision made by the
state, and second, drawing criticism and ire from industrial sectors that play a mission -critical
role in the state's economic well-being;
4) The expanded taxing authority exercised by local jurisdictions might well cost them in economic
competitiveness and recruitment in the future. To use the utility tax example, since those utility
taxes would be markedly higher in certain jurisdictions, businesses would decide in certain cases
to locate in the jurisdiction without the tax markup;
5) It would be difficult, if not impossible, to structure an expanded tax to affect just those
commercial businesses that are involved in destination -sourcing activities. As a result,
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businesses not involved with or affected by the issue could end up paying an additional tax
burden with no "nexus" or policy rationale to support that additional burden.
Provide New Taxing Authority to Jurisdictions that Continue to be Adversely Impacted by Sourcing
The SST Mitigation Executive Committee also considered and discussed the option of statutorily
providing new taxing authority to jurisdictions that continue to be negatively impacted by the switch to
destination -based sourcing.
Like the expanded authority option, this option carries with it several potential benefits including:
o Avoiding state general fund impacts
o Keeping adversely -impacted municipalities "whole"
• Drawing a nexus, to a point, between the activities being taxed and the application of the tax
Committee members also discussed potential ways the new tax could be placed directly on remote
sellers, through some type of surcharge or point -of -collection charge.
However, Committee members saw this option causing an even greater shift of tax burdens onto the
business sector, in response to a decision made by state government. Committee members also foresaw
significant difficulty in devising a tax -collection system that would be efficient and workable. Those
concerns, and the five concerns already noted under the 'expanding taxing authority' option, led
committee members to conclude that this option should not be a preferred option.
Re -set Land Use Priorities to Deal with the Aftereffects of the Change to Destination Sourcing
The SST Mitigation Executive Committee discussed an additional option whichwould not involve any
tax -policy measures or revenue shifts per se, but rather would involve a reset on land use policies
through which jurisdictions host large concentrations ofmanufacturing, warehousing, and distribution
facilities.
The theory behind this option is that local communities would have the ability to react to a new, sales -
tax -driven, service -based economic model by rezoning their communities to host those businesses that
flourish under the new model and to discourage and ultimately phase out those businesses built and
clustered around an outdated economic model. Additionally, such a model would not require the state
to make general fund allocations, and it would not create or shift tax burdens.
However, there were several major concerns that led Committee members to conclude this option was
not only unworkable, but perhaps one of the most damaging options in the long run:
1) City officials pointed out that such an option would cause them to violate countywide planning
policies, regional Growth Management, land use, and employment/growth center policies
approved by Metropolitan Planning Organizations (MPOs) or Regional Planning Organizations
(RPOs). Additionally, the state's own economic cluster strategy, administered through the
Department of Commerce, could be undermined. In other words, individual localities would be
asked to take actions that would be in direct conflict with strategies, land use plans, economic
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development and job -center strategies that entire counties and regions, and the State of
Washington are dependent upon;
2) City officials noted that such an option would also cause their jurisdictions to absorb negative
revenue impacts and re -shuffle their entire economic and job -center strategies in return;
3) The "reset land use policies" option would not just impact clusters of businesses — it would
upend an entire system put in place to support Washington's international -trade -based
economy. In particular, the Ports of Seattle and Tacoma import and export a vast supply of
goods that come from or destined for the warehouses, distribution centers, and manufacturing
facilities in the Green River Valley. Major industrial sectors such as trucking and shipping are
built around the commerce of that very system;
4) While this option might not have an immediate impact on the state general fund, Committee
members felt it could certainly have longer -term and potentially more harmful general fund
impacts by disrupting whole sectors such as manufacturing, distribution, supply firms, etc.;
5) Business representatives also saw this option unfairly penalizing commercial sectors and
undercutting a system that so many types of industries depend upon. Ports, trucking
organizations and the National Association oflndustrial Office Properties (NAIOP) have been
supportive of SST Mitigation Payments because they help compensate the very jurisdictions that
host and support large concentrations of their businesses.
No -Action Alternative
The no -action alternative assumes that the number of cities dealing with revenue dislocations will
diminish over time as remote sales tax revenues under EHB 2163 grow and as a growing trend of online -
based purchasing continues unabated.
While this alternative could be seen as beneficial to the State of Washington by eliminating any general -
fund or policy responsibility for ongoing losses, and while this alternative may be workable for many
cities, there are at least two major flaws with the "no -action" approach:
1) DOR's analysis to date shows that jurisdictions with a particularly high concentration of
warehousing, distribution, and manufacturing will continue to experience significant overall
losses well into the foreseeable future — even with the advent of new sales tax under "remote
sales," and
2) The no -action alternative fundamentally undermines several core principles that form the
underpinnings ofthe Legislature's 2007 Session SST legislation, SSB 5089. The Part IX Sales and
Use Tax Mitigation portion of SSB 5089, while concluding that participation inthe SSTcompact
of states was "in the best interests of the state" also found that "there will be an unintended
adverse impact" on numerous jurisdictions and that "changes in sourcing laws may have
negative implications for industry sectors such as warehousing and manufacturing, as well as
jurisdictions that house a concentration of these industries and have made zoning decisions,
infrastructure investments, bonding decisions, and land use policy decisions based on point of
origin tax rules in place before the effective date of this section".
In establishing the SST Mitigation program and SST Mitigation Payments, the Legislature intended to
have mitigation in place until a jurisdiction's new revenue from either "voluntary compliance" or remote
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sales met or exceeded its ongoing loss from sourcing. As a DOR "Frequently Asked Questions" document
put it in 2008, "When a jurisdiction's voluntary compliance revenue exceeds its loss of local sales tax
revenue, the jurisdiction will not receive mitigation." That has already resulted in the number of
mitigated jurisdictions decreasing from 86 in 2009 to 57 in the first quarter of 2017 (Source: Department
of Revenue).
The Committee concluded that a "no -action" alternative, while beneficial in some ways, would be
harmful to a number of jurisdictions and would undermine the Legislature's own policy and statutory
direction laid out in SSB 5089.
Conclusion
The SST Mitigation Executive Committee recommends continued streamlined sales tax mitigation
payments for the limited number of cities that have not yet received adequate WA Marketplace Fairness
Act and voluntary compliance revenue to offset the loss of streamlined sales tax mitigation payments.
Ongoing data on the WA Marketplace Fairness Act and voluntary compliance revenue collections in
comparison to streamlined sales tax mitigation payments should inform the continuation of streamlined
sales tax mitigation payments in future biennia.
Exhibits
Exhibit A — SST Mitigation Executive Committee Membership List
Exhibit B — Streamlined Sales Tax Mitigation Executive Committee Charter
Exhibit C — RCW 82.14.500
Exhibit D — Legislation SSB 5089
Exhibit E — History, Impacts, and Legal
Exhibit F — 2015 Industrial Lands Report: Chapter 4 pg 4-26 to 4-28
Exhibit G — Mitigation Payments Q1 2018
13 I P a u e
31
SSB 5883 Streamlines Sales Tax Report
Exhibit A
SST Mitigation Executive Committee Membership List
August 31, 2018
City or Organization
Name
Position
Auburn Area Chamber of Commerce
Julia Jordan
CEO
Burlington Chamber of Commerce
Peter Browning
CEO
City of Auburn
Nancy Backus
Mayor
City of Auburn
Shelley Coleman
Finance Director
City of Auburn
Kevin Fuhrer
Assistant Finance Director
City of Auburn
Mike Welch
Government Relations
City of Fife
Hyun Kim
City Manager
City of Fife
Patty Luat
Finance Director
City of Kent
Dana Ralph
Mayor
City of Kent
Derek Matheson
Chief Administrative Officer
City of Kent
Aaron BeMiller
Finance Director
City of Kent
Robert Goehring
City Auditor
City of Kent
Dana Neuts
Communications Manager
Cities of Kent, Fife, and Issaquah
Doug Levy
Government Relations
City of Pasco
Richa Sigel
Finance Director
City of Spokane Valley
Briahna Murray
Government Relations
Cities of Spokane Valley, Pasco,
Lynden, Othello
Chelsea Hager
Government Relations
City of Tukwila
Jennifer Ziegler
Government Relations
City of Woodinville
Blaine Fritts
Finance Director
City of Woodinville
Brynn Brady
Government Relations
Fife Milton Edgewood Chamber of
Commerce
Lora Butterfield
CEO
Seattle Southside Chamber of
Commerce
Andrea Reay
CEO
The Northwest Seaport Alliance
Sean Eagan
Director Government Affairs
Association of Washington Cities
Victoria Lincoln
Government Relations
Association of Washington Cities
Sheila Gall
Legal Counsel
Association of Washington Cities
Andrew Pittelkau
Analyst
141 Pa uc
32
SSB 5883 Streamlines Sales Tax Report August 31, 2018
Exhibit B
Streamlined Sales Tax Mitigation Executive Committee Charter
Purpose:
o The Streamlined Sales Tax Mitigation Executive Committee is to produce a report for
consideration by the Department of Revenue reflecting the impacts of sourcing on jurisdictions
with a high concentration of manufacturing and warehousing facilities, and development of
recommendations for addressing the disproportionate impact of sourcing on these
jurisdictions. This report and recommendations are due to the Department of Revenue by
September 1, 2018, and DOR's final report is due to the Governor and eight appropriate
legislative committees by November 1, 2018.
Scope:
o By September 1st, develop viable recommendation options for the State Legislature to mitigate
the impact of the Streamline Sales Tax initiative on Cities with significant manufacturing and
warehousing business activity. Additionally, to develop communications messages to use as
those cities discuss the recommendations with the legislators and other stakeholders.
Members:
City or Organization
City or Organization
City of Kent
City of Issaquah
Association of
Washington Cities
Gordon Thomas Honeywell
City of Woodinville
City of Fife
Ceiba Consulting
City of Spokane Valley
City of Pasco
City of Tukwila
The Northwest Seaport
Alliance
Outcomes by Levy, LLC
City of Sumner
City of Auburn
Burlington Chamber of
Commerce
City of Othello
Jennifer Ziegler Public
Affairs
Fife/Milton Chambers of
Commerce
Seattle Southside
Chamber of
Commerce
Representatives from Dept. of Commerce and legislative caucuses staff also attended some meetings.
15 IP age
33
SSB 5883 Streamlines Sales Tax Report August 31, 2018
Result:
Measurable impact of whether goal has been achieved.
Resources:
o Identify outside experts on topics that need to be addressed. Industry experts.
o City of Fife will provide location
o AWC will provide support services
Communication Plan:
a Electronic meeting notices
o Meetings in person when available with a phone line for individuals who cannot be physically
present
Deliverables:
o Formal report due to the Department of Revenue on or before September 1, 2018 to be
incorporated into a legislative report
Decision Making:
o By consensus if possible and if not then by majority
Meeting Dates:
o December 15, 2017
o January 12, 2018
• March 16, 2018
• August 21, 2018
16Page
34
SSB 5883 Streamlines Sales Tax Report August 31, 2018
Exhibit C
RCW 82.14.500
Streamlined sales and use tax mitigation account -Funding -Determination of losses. (Effective until
October 1, 2019.)
(1) In order to mitigate local sales tax revenue net losses as a result of the sourcing provisions of the
streamlined sales and use tax agreement ....
(2) Beginning July 1, 2008, and continuing until the department determines annual losses under
subsection (3) of this section, the department must determine the amount of local sales tax net loss
each local taxing jurisdiction experiences as a result of the sourcing provisions of the streamlined sales
and use tax agreement under this title each calendar quarter. The department must determine losses by
analyzing and comparing data from tax return information and tax collections for each local taxing
jurisdiction before and after July 1, 2008, on a calendar quarter basis. The department's analysis may be
revised and supplemented in consultation with the oversight committee as provided in subsection (4) of
this section. To determine net losses, the department must reduce losses by the amount of voluntary
compliance revenue for the calendar quarter analyzed. Beginning December 31, 2008, distributions
must be made quarterly from the streamlined sales and use tax mitigation account by the state
treasurer, as directed by the department, to each local taxing jurisdiction, other than public facilities
districts for losses in respect to taxes imposed under the authority of RCW 82.14 390, in an amount
representing its net losses for the previous calendar quarter. Distributions must be made on the last
working day of each calendar quarter and must cease when distributions under subsection (3) of this
section begin.....
(6)(a) As a result of part II of chapter 28, Laws of 2017 3rd sp. sess., local sales and use tax revenue
is anticipated to increase due to additional tax remittance by marketplace facilitators, remote sellers,
and consumers. This additional revenue will further mitigate the losses that resulted from the sourcing
provisions of the streamlined sales and use tax agreement under this title and should be reflected in
mitigation payments to negatively impacted localjurisdictions.
(b) Beginning January 1, 2018, and continuing through September 30, 2019, the department must
determine the increased sales and use tax revenue each local taxing jurisdiction experiences from
marketplace facilitator/remote seller revenue as a result of RCW 82 08 053, 82.08.0531, 82 32 047,
and 82.32.763, chapter 82 13 RCW, and sections 201, 211, and 213, chapter 28, Laws of 2017 3rd sp.
sess. each calendar quarter. The department must convene the mitigation advisory committee before
January 1, 2018, to receive input on the determination of marketplace facilitator/remote seller revenue.
Beginning with distributions made after March 31, 2018, distributions from the streamlined sales and
use tax mitigation account by the state treasurer, as directed by the department, to each local taxing
jurisdiction, must be reduced by the amount of its marketplace facilitator/remote seller revenue
reported during the previous calendar quarter. No later than December 1, 2019, the department will
determine the total marketplace facilitator/remote seller revenue for each local taxing jurisdiction for
reporting periods beginning January 1, 2018, through reporting periods ending June 30, 2019. If the total
distribution made from the streamlined sales and use tax mitigation account to a local taxing jurisdiction
was not fully reduced by its total amount of marketplace facilitator/remote seller revenue for reporting
periods beginning January 1, 2018, through reporting periods ending June 30, 2019, the department
must reduce the local taxing jurisdiction's distribution of local sales and use tax under RCW 82, I 4 060 by
the excess amount received.
17IPage
35
Exhibit D
Legislation SSB 5089
CERTIFICATION OF ENROLLMENT
SUBSTITUTE SENATE BILL 5089
Chapter 6, Laws of 2007
60th Legislature
2007 Regular Session
STREAMLINED SALES AND USE TAX AGREEMENT
EFFECTIVE DATE: 07/01/08 - Except sections 301, 1301, 1602, and
1701 through 1703, which take effect 7/22/07; and sections 302,
1003, 1006, 1014, and 1018, which have a contingent effective date.
Passed by the Senate February 2, 2007 CERTIFICATE
YEAS 45 NAYS 3
BRAD OWEN
President of the Senate
Passed by the House March 16, 2007
YEAS 76 NAYS 15
FRANK CHOPP
Speaker of the House of Representatives
I, Thomas Hoemann, Secretary of the
Senate of the State of Washington,
do hereby certify that the attached
is SUBSTITUTE SENATE BILL 5089 as
passed by the Senate and the House
of Representatives on the dates
hereon set forth.
THOMAS HOEMANN
Approved March 22, 2007, 2:05 p.m. FILED
March 22, 2007
Secretary
CHRISTINE GREGOIRE Secretary of State
State of Washington
Governor of the State of Washington
36
18 I Page
SUBSTITUTE SENATE BILL 5089
Passed Legislature - 2007 Regular Session
State of Washington
60th Legislature 2007 Regular Session
By Senate Committee on Ways & Means (originally sponsored by Senators
Regala, Zarelli, Eide, Shin, Franklin, Keiser, Rockefeller, Weinstein,
Pridemore, Marr, Hobbs, Rasmussen, Murray, Prentice, Fairley, Fraser,
Spanel, Berkey, Tom, Kohl-Welles, McAuliffe and Kline; by request of
Governor Gregoire)
READ FIRST TIME 01/22/07.
SSB 5089.SL p. 2
37
1 PART IX
2 SALES AND USE TAX MITIGATION
3 NEW SECTION. Sec. 901. (1) The legislature finds and declares
4 that:
5 (a) Washington state's participation as a member state in the
6 streamlined sales and use tax agreement benefits the state, all its
7 local taxing jurisdictions, and its retailing industry, by increasing
8 state and local revenues, improving the state's business climate, and
9 standardizing and simplifying the state's tax structure;
10 (b) Participation in the streamlined sales and use tax agreement is
11 a matter of statewide concern and is in the best interests of the
12 state, the general public, and all local jurisdictions that impose a
13 sales and use tax under applicable law;
14 (c) Participation in the streamlined sales and use tax agreement
15 requires the adoption of the agreement's sourcing provisions, which
16 change the location in which a retail sale of delivered tangible
17 personal property occurs for local sales tax purposes from the point of
18 origin to the point of destination;
19 (d) Changes in the local sales tax sourcing law provisions to
20 conform with the streamlined sales and use tax agreement will cause
21 sales tax revenues to shift among local taxing jurisdictions. The
22 legislature finds that there will be an unintended adverse impact on
23 local taxing jurisdictions that receive less revenues because local tax
24 revenues will be redistributed, with revenue increases for some
25 jurisdictions and reductions for others, due solely to changes in local
26 sales tax sourcing rules to be implemented under section 503 of this
27 act and the chapter ..., Laws of 2007 (this act) amendments to ROW
28 82.14.020, even though no local taxing jurisdiction has changed its tax
29 rate or tax base;
30 (e) The purpose of providing mitigation to such jurisdictions is to
31 mitigate the unintended revenue redistribution effect of the sourcing
32 law changes among local governments;
33 (f) It is in the best interest of the state and all its
34 subdivisions to mitigate the adverse effects of amending the local
35 sales tax sourcing provisions to be in conformance with the streamlined
36 sales and use tax agreement;
37 (g) Additionally, changes in sourcing laws may have negative
38 implications for industry sectors such as warehousing and
p. 3
38
SSB 5089.SL
1 manufacturing, as well as jurisdictions that house a concentration of
2 these industries and have made zoning decisions, infrastructure
3 investments, bonding decisions, and land use policy decisions based on
4 point of origin sales tax rules in place before the effective date of
5 this section, and the mitigation provided by sections 901 through 905
6 of this act is intended to help offset those negative implications; and
7 (h) It is important that the state of Washington maintain its
8 supply of industrial land for present and future economic development
9 activities, and local governments taking advantage of the mitigation
10 provided by sections 901 through 905 of this act should strive to
11 maintain the supply of industrial land available for economic
12 development efforts.
13 (2) The legislature intends that the streamlined sales and use tax
14 mitigation account established in section 902 of this act have the sole
15 objective of mitigating, for negatively affected local taxing
16 jurisdictions, the net local sales tax revenue reductions incurred as
17 a result of section 503 of this act and the chapter ..., Laws of 2007
18 (this act) amendments to RCW 82.14.020.
19 NEW SECTION. Sec. 902. A new section is added to chapter 82.14
20 RCW to read as follows:
21 (1) The streamlined sales and use tax mitigation account is created
22 in the state treasury. The state treasurer shall transfer into the
23 account from the general fund amounts as directed in section 903 of
24 this act. Expenditures from the account may be used only for the
25 purpose of mitigating the negative fiscal impacts to local taxing
26 jurisdictions as a result of section 503 of this act and the chapter
27 ..., Laws of 2007 (this act) amendments to RCW 82.14.020.
28 (2) Beginning July 1, 2008, the state treasurer, as directed by the
29 department, shall distribute the funds in the streamlined sales and use
30 tax mitigation account to local taxing jurisdictions in accordance with
31 section 903 of this act.
32 (3) The definitions in this subsection apply throughout this
33 section and RCW 82.14.390 and section 903 of this act.
34 (a) "Agreement" means the same as in RCW 82.32.020.
35 (b) "Local taxing jurisdiction" means counties, cities,
36 transportation authorities under RCW 82.14.045, public facilities
SSB 5089.SL p. 4
39
1 districts under chapters 36.100 and 35.57 RCW, public transportation
2 benefit areas under ROW 82.14.440, and regional transit authorities
3 under chapter 81.112 RCW, that impose a sales and use tax.
4 (c) "Loss" or "losses" means the local sales and use tax revenue
5 reduction to a local taxing jurisdiction resulting from the sourcing
6 provisions in section 502 of this act and the chapter ..., Laws of 2007
7 (this act) amendments to RCW 82.14.020.
8 (d) "Net loss" or "net losses" means a loss offset by any voluntary
9 compliance revenue.
10 (e) "Voluntary compliance revenue" means the local sales tax
11 revenue gain to each local taxing jurisdiction reported to the
12 department from persons registering through the central registration
13 system authorized under the agreement.
14 (f) "Working day" has the same meaning as in ROW 82.45.180.
15 NEW SECTION. Sec. 903. A new section is added to chapter 82.14
16 RCW to read as follows:
17 (1) In order to mitigate local sales tax revenue net losses as a
18 result of the sourcing provisions of the streamlined sales and use tax
19 agreement under this title, the state treasurer shall transfer into the
20 streamlined sales and use tax mitigation account from the general fund
21 the sum of thirty-one million six hundred thousand dollars on July 1,
22 2008. On July 1, 2009, and each July 1st thereafter, the state
23 treasurer shall transfer into the streamlined sales and use tax
24 mitigation account from the general fund the sum required to mitigate
25 actual net losses as determined under this section.
26 (2) Beginning July 1, 2008, and continuing until the department
27 determines annual losses under subsection (3) of this section, the
28 department shall determine the amount of local sales tax net loss each
29 local taxing jurisdiction experiences as a result of the sourcing
30 provisions of the streamlined sales and use tax agreement under this
31 title each calendar quarter. The department shall determine losses by
32 analyzing and comparing data from tax return information and tax
33 collections for each local taxing jurisdiction before and after the
34 effective date of this section on a calendar quarter basis. The
35 department's analysis may be revised and supplemented in consultation
36 with the oversight committee as provided in subsection (4) of this
37 section. To determine net losses, the department shall reduce losses
p. 5
40
SSB 5089.SL
1 by the amount of voluntary compliance revenue for the calendar quarter
2 analyzed. Beginning December 31, 2008, distributions shall be made
3 quarterly from the streamlined sales and use tax mitigation account by
4 the state treasurer, as directed by the department, to each local
5 taxing jurisdiction, other than public facilities districts for losses
6 in respect to taxes imposed under the authority of ROW 82.14.390, in an
7 amount representing its net losses for the previous calendar quarter.
8 Distributions shall be made on the last working day of each calendar
9 quarter and shall cease when distributions under subsection (3) of this
10 section begin.
11 (3) (a) By December 31, 2009, or such later date the department in
12 consultation with the oversight committee determines that sufficient
13 data is available, the department shall determine each local taxing
14 jurisdiction's annual loss. The department shall determine annual
15 losses by comparing at least twelve months of data from tax return
16 information and tax collections for each local taxing jurisdiction
17 before and after the effective date of this section. The department
18 shall not be required to determine annual losses on a recurring basis,
19 but may make any adjustments to annual losses as it deems proper as a
20 result of the annual reviews provided in (b) of this subsection.
21 Beginning the calendar quarter in which the department determines
22 annual losses, and each calendar quarter thereafter, distributions
23 shall be made from the streamlined sales and use tax mitigation account
24 by the state treasurer on the last working day of the calendar quarter,
25 as directed by the department, to each local taxing jurisdiction, other
26 than public facilities districts for losses in respect to taxes imposed
27 under the authority of ROW 82.14.390, in an amount representing one-
28 fourth of the jurisdiction's annual loss reduced by voluntary
29 compliance revenue reported during the previous calendar quarter.
30 (b) The department's analysis of annual losses shall be reviewed by
31 December 1st of each year and may be revised and supplemented in
32 consultation with the oversight committee as provided in subsection (4)
33 of this section.
34 (4) The department shall convene an oversight committee to assist
35 in the determination of losses. The committee shall include one
36 representative of one city whose revenues are increased, one
37 representative of one city whose revenues are reduced, one
38 representative of one county whose revenues are increased, one
SSB 5089.SL p. 6
41
1 representative of one county whose revenues are decreased, one
2 representative of one transportation authority under RCW 82.14.045
3 whose revenues are increased, and one representative of one
4 transportation authority under RCW 82.14.045 whose revenues are
5 reduced, as a result of section 503 of this act and the chapter ...,
6 Laws of 2007 (this act) amendments toRCW 82.14.020. Beginning July 1,
7 2008, the oversight committee shall meet quarterly with the department
8 to review and provide additional input and direction on the
9 department's analyses of losses. Local taxing jurisdictions may also
10 present to the oversight committee additional information to improve
11 the department's analyses of the jurisdiction's loss. Beginning
12 January 1, 2010, the oversight committee shall meet at least annually
13 with the department by December 1st.
14 (5) The rule -making provisions of chapter 34.05 RCW do not applyto
15 this section.
16 Sec. 904. ROW 82.14.390 and 2006 c 298 s 1 are each amended to
17 read as follows:
18 (1) Except as provided in subsection ((-4-6±)) (7) of this section,
19 the governing body of a public facilities district created before
20 July 31, 2002, under chapter 35.57 or 36.100 ROW that commences
21 construction of a new regional center, or improvement or rehabilitation
22 of an existing new regional center, before January 1, 2004, or (b)
23 created before July 1, 2006, under chapter 35.57 RCW in a county or
24 counties in which there are no other public facilities districts on
25 June 7, 2006, and in which the total population in the public
26 facilities district is greater than ninety thousand that commences
27 construction of a new regional center before February 1, 2007, may
28 impose a sales and use tax in accordance with the terms of this
29 chapter. The tax is in addition to other taxes authorized by law and
30 shall be collected from those persons who are taxable by the state
31 under chapters 82.08 and 82.12 RCW upon the occurrence of any taxable
32 event within the public facilities district. The rate of tax shall not
33 exceed 0.033 percent of the selling price in the case of a sales tax or
34 value of the article used in the case of a use tax.
35 (2)(a) The governing body of a public facilities district imposing
36 a sales and use tax under the authority of this section may increase
37 the rate of tax up to 0.037 percent if, within three fiscal years of
p. 7
42
SSB 5089.SL
1 the effective date of this section, the department determines that, as
2 a result of section 503 of this act and the chapter ..., Laws of 2007
3 (this act) amendments to ROW 82.14.020, a public facilities district's
4 sales and use tax collections for fiscal years after the effective date
5 of this section have been reduced by a net loss of at least 0.50
6 percent from the fiscal year before the effective date of this section.
7 The fiscal year in which this section becomes effective is the first
8 fiscal year after the effective date of this section.
9 (b) The department shall determine sales and use tax collection net
10 losses under this section as provided in section 903 (2) and (3) of
11 this act. The department shall provide written notice of its
12 determinations to public facilities districts. Determinations by the
13 department of a public facilities district's sales and use tax
14 collection net losses as a result of section 503 of this act and the
15 chapter ..., Laws of 2007 (this act) amendments to ROW 82.14.020 are
16 final and not appealable.
17 (c) A public facilities district may increase its rate of tax after
18 it has received written notice from the department as provided in (b)
19 of this subsection. The increase in the rate of tax must be made in
20 0.001 percent increments and must be the least amount necessary to
21 mitigate the net loss in sales and use tax collections as a result of
22 section 503 of this act and the chapter ..., Laws of 2007 (this act)
23 amendments to RCW 82.14.020. The increase in the rate of tax is
24 subject to RCW 82.14.055.
25 (3) The tax imposed under subsection (1) of this section shall be
26 deducted from the amount of tax otherwise required to be collected or
27 paid over to the department of revenue under chapter 82.08 or 82.12
28 ROW. The department of revenue shall perform the collection of such
29 taxes on behalf of the county at no cost to the public facilities
30 district.
31 (((3))) (4) No tax may be collected under this section before
32 August 1, 2000. The tax imposed in this section shall expire when the
33 bonds issued for the construction of the regional center and related
34 parking facilities are retired, but not more than twenty-five years
35 after the tax is first collected.
36 ((-(-44-.)) (5) Moneys collected under this section shall only be used
37 for the purposes set forth in ROW 35.57.020 and must be matched with an
38 amount from other public or private sources equal to thirty-three
SSB 5089.SL p. 8
43
1 percent of the amount collected under this section, provided that
2 amounts generated from nonvoter approved taxes authorized under chapter
3 35.57 ROW or nonvoter approved taxes authorized under chapter 36.100
4 RCW shall not constitute a public or private source. For the purpose
5 of this section, public or private sources includes, but is not limited
6 to cash or in -kind contributions used in all phases of the development
7 or improvement of the regional center, land that is donated and used
8 for the siting of the regional center, cash or in -kind contributions
9 from public or private foundations, or amounts attributed to private
10 sector partners as part of a public and private partnership agreement
11 negotiated by the public facilities district.
12 (((5))) (6) The combined total tax levied under this section shall
13 not be greater than ((0.033)) 0.037 percent. If both a public
14 facilities district created under chapter 35.57 RCW and a public
15 facilities district created under chapter 36.100 RCW impose a tax under
16 this section, the tax imposed by a public facilities district created
17 under chapter 35.57 ROW shall be credited against the tax imposed by a
18 public facilities district created under chapter 36.100 RCW.
19 ((-(-6+)) (7) A public facilities district created under chapter
20 36.100 ROW is not eligible to impose the tax under this section if the
21 legislative authority of the county where the public facilities
22 district is located has imposed a sales and use tax under RCW
23 82.14.0485 or 82.14.0494.
24 NEW SECTION. Sec. 905. A new section is added to chapter 44.28
25 ROW to read as follows:
26 (1) During calendar year 2010, the joint legislative audit and
27 review committee shall review the mitigation provisions for local
28 taxing jurisdictions under RCW 82.14.390 and section 903 of this act to
29 determine the extent to which the mitigation provisions address the
30 needs of local taxing jurisdictions for which the sourcing provisions
31 in section 503 of this act and the chapter ..., Laws of 2007 (this act)
32 amendments to RCW 82.14.020 had the greatest fiscal impact. In
33 conducting the study, the committee shall solicit input from the
34 oversight committee created in section 903 of this act and additional
35 local taxing jurisdictions as thecommittee determines. The department
36 of revenue and the state treasurer shall provide the committee with any
37 data within their purview that the committee considers necessary to
p. 9
44
SSB 5089.SL
1 conduct the review. The committee shall report to the legislature the
2 results of its findings, and any recommendations for changes to the
3 mitigation provisions under ROW 82.14.390 and section 903 of this act,
4 by December 31, 2010.
5 (2) The definitions in section 902 of this act apply to this
6 section.
7 (3) This section expires July 1, 2011.
Passed by the Senate February 2, 2007.
Passed by the House March 16, 2007.
Approved by the Governor March 22, 2007.
Filed in Office of Secretary of State March 22, 2007.
SSB 5089.SL p. 10
45
SSB 5883 Streamlines Sales Tax Report
Exhibit E
History, Impacts, and Legal
August 31, 2018
A History Lesson on Streamlined Sales Tax (SST) Mitigation
& Overlap with Remote (Internet) Sales Tax Collection
How the SST Agreement Came to Be, Legal Issues, and More
Doug Levy, Outcomes By Levy; Sheila Gall, AWC; Robert Goehring, City of Kent
Why SST — and why an Agreement among states? — Doug Levy, Outcomes By Levy, LLC
o The SST compact (aka Streamlined Sales and Use Tax Agreement) was triggered by two key
factors:
1) The 1992 Quill decision by the U.S. Supreme Court held that states cannot require
retailers with no in -state physical presence to collect sales and use tax. Only the U.S.
Congress could take that action; and
2) The phenomenal growth in the use of the internet as a means to buy goods online
vs. in-store — what might be called the "Bezos effect."
In March 2000 a number of states and other stakeholders formed the Streamlined Sales and
Use Tax Project. This project was designed to simplify, modernize, and standardize sales
and use tax laws, definitions, and practices, to bolster the state's case with Congress that it
should allow for internet sales to be subject to sales tax;
o States recognized that the growth of "e-tail" or online sales was going to be revolutionary.
Back in 2003, a Department of Revenue study done for the Legislature estimated annual
losses to Washington State from internet sales of $191 million for the State of Washington
and $59 million for local governments;
o Increasingly, "Main Street" businesses realized that online sellers who didn't pay taxes were
increasingly taking away their business as the ease of shopping online became more and
more apparent;
o In 2002, a collection of states formed the Streamlined Sales and Use Tax Agreement
(SSUTA), a compact of states designed to achieve a simplified sales tax collection system.
The Agreement would become effective when 10 states representing at least 20 percent of
the U.S. population became substantially compliant with the SSUTA.
o One key factor in making Washington and many other states compliant was to make the
"sourcing" of sales tax based the final destination/delivery of a product — which is in
harmony with how online transactions take place but at odds with the fact that half the
states in the U.S., including Washington, had been using an "origin -based" system to credit
sales tax at a local level;
o So what does that mean? If a customer purchases a shirt at a retail store located in Spokane,
the "point of origin" and the "point of destination" are the same and the sales tax continues
181Page
46
SSB 5883 Streamlines Sales Tax Report August 31, 2018
to be credited to the City of Spokane. However, if the customer purchases a counch from a
furniture store located in Auburn and the store has it delivered from its warehouse located
in Fife to the customer's home or business in Des Moines, then sales tax is credited to the
City of Des Moines rather than the City of Fife. Why" Under the SSUTA for which
Washington is a member, with certain exceptions sales tax for retail deliveries are credited
based on the point of destination (Des Moines) rather than the point of origin (Fife
warehouse);
o The change in sourcing from origin -basis to destination -basis has an immediate and
significant adverse impact to sales tax revenues to communities with high concentrations of
warehousing, distribution and manufacturing activities including but not limited to, the
cities of Auburn, Kent, Tukwila, Fife and Sumner. In fact, those communities form the
nucleus of the 2nd-largest warehousing distribution complex on the West Coast. Noting that
communities such as Spokane Valley and Pasco are also significantly impacted;
o In 2003, after the Department of Revenue initially estimated a "sourcing" change was only
going to impact a "few" warehousing -based cities, the Legislature considered legislationto
adopt several provisions ofthe SSUTA, including sourcing. A number of adversely impacted
cities urged the Legislature to first study and better understand the full impacts of a
sourcing change;
o The 2003 Legislature did indeed adopt a bill on Streamlined Sales Tax— Senate Bill 5783
(Chapter 168, Laws of 2003). But, based on the concerns over the sourcing issue, the
Legislature directed that DOR undertake a comprehensive study of the impacts of a
sourcing change.
o The DOR's study, completed in December 2003, showed that in fact more than 120 cities,
counties, transit agencies, and Public Facility Districts (PFDs) would be negatively impacted
by a local sales tax sourcing change from "origin -based" to "destination -based" — with
severe impacts to some. The study identified a series of different possible ways to mitigate
the impacts of the sourcing change;
o In 2004 and 2005, the Legislature debated — but did not adopt — SST legislation that
included the local sales tax sourcing change. Fundamental disagreements among local
governments — with some recommending partial mitigation and others insisting on full
mitigation —precluded legislation from being adopted.
o Heading into the 2006 Session of the Legislature, cities and counties coalesced around a
"full mitigation" approach with regard to the SST, one endorsed and requested by then -
Governor Gregoire. 2006 legislation was not enacted —but this was more over timing issues
than substantive disagreement;
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SSB 5883 Streamlines Sales Tax Report August 31, 2018
o In 2007, the Legislature enacted SSB 5089, bringing Washington State in line with the
national SSTA with respect to sourcing rules. The promise of a full mitigation approach was
a key underpinning of the legislation, which clearly would not have been agreed to or
adopted without such an approach;
o The Governor and the Legislature made a strong commitment to SST full mitigation; based
on the fact that the sourcing change was a major and fundamental change in local sales tax
rules that had been in place for decades. The Legislature also recognized that mitigation
was critical to the upkeep of numerous warehousing, distribution center, and industrial
areas throughout the state.
o The full mitigation was based on an "actual loss" and "actual experience" approach, and
involved use of an advisory committee to work with the DOR on mitigation policies;
o The mitigation program was designed so that jurisdictions would receive mitigation
payments until such time as their gains from the "voluntary compliance" provisions of the
SSTA (voluntary compliance is calculated from sales tax accruing from voluntary sales tax
collection by companies coming into the SSTA compact) met or exceeded their losses from
the sourcing change. A DOR "Frequently Asked Questions" document from 2008 confirms
this: "When a jurisdiction's voluntary compliance revenue exceeds its loss of local sales tax
revenue, the jurisdiction will not receive mitigation."
Legal Issues and Challenges — and Along Comes the "Marketplace Fairness Act" — Sheila Gall,
Legal Counsel, AWC
o Washington State made changes to its sales tax system, including changing from an origin -
based sales tax sourcing system to a destination -based sales tax sourcing in 2007 (SSB
5089);
o This was intended as a step in implementing sales tax collection requirements on internet
sales and a way to further the case for state and local governments working to convince
Congress to act on federal legislation requiring sales tax collection by internet retailers
which became known as "Main Street"or "Marketplace Fairness" in sales taxpolicy. Passage
of SSB 5089 also was to give a voice to Washington on the governing board of the national
streamlined agreement;
o Under the national agreement, companies could "voluntarily" join and collect sales tax on
behalf of the member states. They would get two big benefits in return:
1) "vendor compensation" -- financial assistance in the costs of sales tax collection; and 2)
relief from liability against back taxes in the event their actual "nexus" in a state came under
legal question;
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SSB 5883 Streamlines Sales Tax Report August 31, 2018
o The sourcing change from original to destination resulted in dislocations of sales tax
revenues at the local level — both negative and positive. The negative impacts were
particularly hard-hitting for jurisdictions with large warehouses or a retail base that
included delivery based items such as furniture that had previously sourced sales tax to
those warehouse or store jurisdictions;
o As part of the agreement with impacted jurisdictions in implementing the Streamlined Sales
Tax changes, the Legislature began appropriating approximately $50 million per biennium
in SST mitigation;
o The program mitigates actual sales tax losses based on 2008 estimates, reduced by actual
voluntary compliance new revenues. The calculation would also include new revenues if
Congress acts to require collection by internet retailers;
o Mitigation was designed to ramp down and would end when voluntary compliance new
revenues exceeded losses. In 2009, 86 jurisdictions, including 55 cities, received mitigation.
In the first quarter of 2017, 57 jurisdictions, including 49 cities, received mitigation. The
largest mitigation recipient has been King County Metro. For cities, the largest payments go
to Kent, Auburn, Tukwila, Issaquah, Spokane Valley, Fife, Woodinville, Sumner, Everett,
Lynnwood, and Pasco;
o Regarding the EHB 2163 legislation we referenced earlier, for at least 11 of the mitigation
jurisdictions, the new revenue resulting from new sales tax collections from out of state
retailers in EHB 2163 would not cover the loss of their expected SST mitigation payments;
o AWC has included passage of a requirement for sales tax collection on internet and other
remote sales purchases as a federal priority for many years. While there has been a new
push to enact federal Marketplace Fairness legislation again this year, to date Congress has
not taken action;
o The stakes of remote sales tax collection are very high, though, and tell you why this is so
critical. An early 2014 DOR estimate of a Congressional Marketplace Fairness bill showed it
would have resulted in $493.2 million in new biennial sales taxes to the State of Washington
in 2015-17 and $542.6 million in 2017-19;
o While Congress has not taken action on the Marketplace Fairness issue, other legal
precedents surfaced;
o In 2015, Justice Kennedy wrote a concurrence in Direct Marketing Association v. Brohl in a
case involving Colorado information reporting requirements stating that the "legal system
should find an appropriate case for this Court to reexamine Quill";
o The concurrence recognized the changed circumstances of the last 20 years of Quill has had
on state and local governments due to rise of internet purchases, Congress's failure to pass
the Marketplace Fairness Act, and states' need to improve use tax collection;
21 113.ae
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SSB 5883 Streamlines Sales Tax Report August 31, 2018
o Two states, South Dakota and Alabama. have enacted sales tax collection requirements that
are moving through the courts, with the expectation of review by the US Supreme Court as a
-Quillchal lenge.- The South Dakota case is currently before the U.S Supreme Court waiting
for a decision on whether the court will accept review;
o Several more states have taken other steps to improve collections by out of state
businesses. Colorado, Oklahoma, South Dakota, and Vermont —and now Washington --have
enacted reporting or registration requirements on remote sellers;
A Case Study on why "Full Mitigation" isn't necessarily full —and the hardships on
certain cities even with SST Mitigation and the promise of remote sales tax — Robert
Goehring, City ofKent
According to the March 2015 PSRC Industrial Lands Report the Puget Sound regional
industrial land area serves as a significant economic engine for the regional and state
economy. Specifically:
o 28,615 net acres of industrial -zoned and designated lands spread across four
counties, 65 jurisdictions, and military and tribal lands.
o In 2012, total wages paid out by industrial activities on industrial lands were $24.4
billion, or 23.2% of all wages paid out in the region in 2012.
o Estimated state tax revenues generated by industrial activities on industrial lands
totaled over $2.25 billion in 2012.
o Kent -Renton Subarea Profile:
o 5,970 acres (8% ofRegion' s Industrial Land)
o 49,300 industrial jobs (10% of Regions jobs)
o 14,500 non -industrial jobs
o Ownership by parcel area (Private - 91%; Public — 9%)
o Average parcel size 4.2 acres
o Specialization — Aerospace, Wholesaling and Transportation Distribution
and Logistics (TDL)
2. The City ofKent GreenRiverValley is one ofeightPSRCRegionalManufacturing/Industrial
Growth Centers and, as such, is a vital component of the regional and state economy.
The City continues to spend a significant amount of money related to the impacts of
warehousing, manufacturing and related transportation activities, including, but not limited
to, construction and maintenance of roads.
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SSB 5883 Streamlines Sales Tax Report August 31, 2018
3. Effective July 1, 2008 and pursuant to RCW 82.14.490 and as required by the SSUTA, local
sales tax distribution for retail deliveries switched from origin -based sourcing to
destination based sourcing resulting in a significant decrease in sales/use tax and local
business and occupation tax for jurisdictions with high concentrations of warehousing and
manufacturing facilities.
Effective July 1, 2008 and pursuant to RCW 82.14.500 and 82.14.390, mitigation for
sourcing losses for negatively impacted local governments was established as follows:
❑ All except PFDs Direct quarterly payments from the state calculated as the
sourcing loss ("measurementperiod" - comparison of FY 2008 v. 2009 sales/use tax
at the individual business level) less the local portion of "voluntary compliance"
(from businesses registering under the SSUTA)
❑ PFDs —Eligible if the sourcing loss is at least.5%o between the measurement period
and current annual revenues up to a maximum rate of .037 percent
5. The Department of Revenue worked with impacted local governments to determine the
estimated annual sourcing losses through comparison ofpre-sourcing (July 1, 2007 through
June 30, 2008) and post -sourcing (July 1, 2008 through June 30, 2009) sales tax at the
individual jurisdiction for businesses impacted by the sourcing change.
6. On a quarterly basis for the annual period under review, the Department of Revenue
calculated the sourcing losses for each jurisdiction and provided each jurisdiction with
respective detail at the individual business level. For example, the Department of Revenue
provided information for each impacted business comprised largely as the difference
between the reporting periods Q3 2007 (July 1, 2007 through September 30, 2007) and the
reporting periods Q3 2008 (July 1, 2008 through September 30, 2008).
7. The Department of Revenue remitted payments during the annual measurement period (FY
2007 v. FY 2008) on the last day of the third month for each quarterly measurement period.
For example, the payment for Q3 2008 v. Q3 2009 payment was made on December 31,
2009.
8. Based on in part on feedback received from the impacted local governments, the
Department of Revenue adjusted subsequent quarterly calculations during the
measurement period to prospectively address concerns noted. For example, the
Department's analysis may have excluded a company that should have been included in the
calculations.
9. After all four quarterly measurement periods were completed, the Department of Revenue
established a fixed estimated sourcing loss for use in the calculation of quarterly mitigation
payments effective FY 2010.
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SSB 5883 Streamlines Sales Tax Report August 31, 2018
10. Mitigation was calculated based on the fixed estimated sourcing loss less the local
government portion of"voluntary compliance" received from businesses operating in the
jurisdictions that had registered to collect and remit sales and use tax under the SSUTA.
11, The measurement period (FY 2009) was during the trough of the Great Recession and the
estimated sourcing loss calculations were not adjusted for the recovery, for normal
sales/use tax growth, or for subsequent changes in warehousing/manufacturing activity.
12. As a result, the City ofKent's fixed sourcing loss estimate ($5 million per year) only
represents 39% of the 2012 estimated actual sourcing losses ($12.7 million) based on
Department ofRevenue information provided to the Puget Sound Regional Council for
PRSC's March 2015 Industrial Lands Report.
13. Due to the disproportionate losses under SSUTA to the City ofKent, the WA Market Place
Fairness Act would only represent an estimated $444,600 in annual sales tax revenues or
9% of annual mitigation currently received ($5.0 million).
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SSB 5883 Streamlines Sales Tax Report August 31, 2018
Exhibit F
2015 Industrial Lands Report: Chapter 4 pg 4-26 to 4-28
Impacts of Streamlined Sales Tax Policy
For most activities on industrial lands, tax revenues are directly levied by the
jurisdiction where the industrial activity takes place. A major exception is sales tax
levied on wholesaling activities. According to the streamlined sales tax (SST) policy,
goods that are sold over the Internet or by phone are subject to the sales levy at the
place of final destination. In the case of many Wholesaling & Warehousing activities,
the immediate implication of this rule is that jurisdictions that are home to many
Wholesaling and Warehousing jobs may not see a direct fiscal revenue stream
associated with these activities.
To illustrate these impacts, local sales tax revenues were calculated for Wholesaling &
Warehousing activities on industrial lands. These activities, across all industrial lands
region wide, generate an estimated $49.8 billion in business revenues. Of this, an
estimated 6.2% is in the form of final demand sales, and thus subject to a sales tax levy.
Sales transacted within the region account for an estimated 95% of total sales (the
remainder representing sales to customers outside the central Puget Sound region),
resulting in total regional taxable retail sales of $2.9 billion in 2012.
Jurisdictions with the largest number of Wholesaling & Warehousing activities
employment and associated business revenues include Kent ($9.5 billion), Seattle ($8.6
billion), Tacoma ($4.6 billion), Renton ($3.6 billion), and Auburn ($2.5 billion). If sales
tax levies were restricted to the origin of sale (and not destination), the City of Kent
would collect, based on the above estimates, more than $16.8 million in sales tax
revenues in 2012. However, the SST lowers this total to $4.1 million, a hypothetical net
loss of $12.7 million (Exhibit 4.28). Conversely, the City of Seattle, which under an
origin -based sales tax would directly collect $15.1 million in sales tax revenues
generated by Warehousing & Wholesaling activities, under the SST collects an
estimated $25.4 million, a difference of $10.3 million.
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SSB 5883 Streamlines Sales Tax Report August 31, 2018
Exhibit4.28. Cities with Largest Absolute Change in Wholesaling &
Warehousing Sales Tax Due to SST, 2012, (est., Mils. $)
Estimated Actual Loss or Gain in
Sales Taxes Sales Taxes Local Sales Tax
Rank City W&W Revenues Collected if no SST Collected Revenues
1 Kent 9,517 16.8 4.1 -12.7
2 Seattle 8,562 15.1 25.4 10.3
3 Bellevue 102 0.2 6.0 5.8
4 Renton 3,632 6.4 2.4 -4.0
5 Tacoma 4,631 8.2 5.2 -3.0
6 Sumner 2,155 2.9 0.5 -2.4
7 Auburn 2,451 4.3 2.6 -1.7
8 Lynnwood 50 0.1 1.2 1.1
9 Kirkland 383 0.7 1.7 1.0
10 Bremerton 34 0.0 0.9 0.8
Source: \Washington Association of Cities, 2013; \Washington State Depai ment of Revenue, 2014;
Community Attributes Inc., 2014.
Note: Loss of gain estimates may not exactly equal differences across other columns due to rounding.
Washington's streamlined sales tax policies went into effect on July 1, 2008, nearly seven years
ago. Some cities, such as Kent, may now be questioning the fiscal benefits of accommodating
warehousing activities, since state laws for municipal taxes so heavily favor retail sales with
points of sale locally. Warehousing is a critical component of the regional economy, however,
and the local economic benefits of warehousing do not hinge on SST alone. The local
economy, local residents' job opportunities. and the city's role in the regional economy
factor heavily into the relationship between local zoning and economic impacts, among
other considerations.
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SSB 5883 Streamlines Sales Tax Report
Exhibit G
Mitigation Payments Q1 2018
August 31, 2018
• June 29, 2018 Payment for Quatter .., 2018 Activity Note 1
Ranking
Jurisdiction
Location Jurisdiction
Code type
Net revenue
impact
Mitigation
payment made
Note 1: Calculation of Mitigation Payments, Quarterly Mitigation Payments are calculated by the Department of
Revenue for each jurisdiction based on the Department of Revenue Calculated Sourcing Loss less the local
government portion of Voluntary Compliance and, effective January 1, 2018, WA Marketplace Fairness Act sales
and use tax. "Calculated Sourcing Loss" means the sales and use tax loss experienced by the jurisdiction based
on comparison of sales tax for certain businesses between the pre -sourcing (July 1, 2007 through June 30, 2018)
and the post -sourcing (July 1, 2008 through June 30, 2009) tax return periods. "Voluntary Compliance" means sales
and use tax attributed to the jurisdiction collected from businesses voluntarily registering to collect and remit sales
and use tax under the Streamlined Sales and Use Tax Agreement (SSUTA). "WA Marketplace Fairness Act" means
sales and use tax attributed to the jurisdiction collected from businesses reporting and/or collecting and remitting
sales and use tax pursuant to SHB 2186 Washington State Marketplace Fairness Act (MPFA). For example, the
City of Kent's mitigation payment for June 29, 2018 representing Quarter 1, 2018 activity ($1,136,711) incorporates
one quarter of its Calculated Annual Sourcing Loss ($1,257,611) [$5,030,445 divided by four] less Voluntary
Compliance ($13,501) and less WA Marketplace Fairness Act ($107,399).
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SSB 5883 Streamlines Sales Tax Report
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
KENT
August 31, 2018
1715 City ($1,136,711,13) $1,136,711.13
AUBURN 1702 City ($414 606.59) $414,606.59
TUKWILA 1729 City ($259,185.05) $259,185.05
ISSAQUAH 1714 City ($153,928.45) $153,928.45
FIFE 2706 City ($122,798,67) $122,798.67
WOODINVILLE 1735 City ($111,263.11) $111,263.11
SUMNER 2716 City ($99,089.41) $99,089.41
SPOKANE VALLEY 3213 City ($75,976,91) $75,976.91
BURLINGTON 2902 City ($23,636.75) $23,636.75
LYNNWOOD 3110 City ($20,548.29) $20,548.29
OTHELLO 0103 City ($18842.90) $18,842.90
MILTON 1731 City ($16,842.68) $16,842,68
MONROE 3112 City ($8,736.04) $8,736.04 ti
LYNDEN 3705 City ($6,509 78) $6,509.78
COULEE CITY 1301 City ($3,711.57) $3,711.57
LIBERTY LAKE 3212 City ($3,25'4,10) $3,254.10
17 PACIFIC
18 PASCO
19 FAIRFIELD
20 ST. JOHN
21 TOPPENISH
22 HOQUTAM
23 LONG BEACH
24 NOOKSACK
25 LATAH
26 ALGONA
1723 City
1104 City
3204 City
3814 City
3910 City
1404 City
City
City
2502
3706
3205
1701
City
City
64.61)
;792.37)
59.40)
1;526.7'3)
($1,021.88)
($866.47)
($860,87)
($780,20)
($666.90)
($222.28)
$3,164.61
$1,792.37
$1,559.40
$1,526.73
$1,021.88
$866.47
$860.87
$780.20
$666.90
$222.28
T
urisdictions Rece
wing Pay
2
4'.
2,488,103.14'
SEATTLE
KING COUNTY
1726
1700
City $1,530,159.72
County $646,355.56
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SSB 5883 Streamlines Sales Tax Report August 31, 2018
3 PIERCE COUNTY
4 SNOHOMISH COUNTY
5 KITSAP COUNTY
6 WHATCOM COUNTY
7 THURSTON COUNTY
8 SPOKANE COUNTY
9 BENTON COUNTY
10 CLARK COUNTY
11 BELLEVUE
12 ISLAND COUNTY
13 TACOMA
14 SPOKANE CITY
15 YAKIMA COUNTY
16 OLYMPIA
17 KENNEWICK
18 RICHLAND
19 SKAGIT COUNTY
20 VANCOUVER
21 BELLINGHAM
22 RENTON
23 GRANT COUNTY
24 BOTHELL
25 KIRKLAND
26 CLALLAM COUNTY
27 REDMOND
28 KITTITAS COUNTY
29 SAMMAMISH
30 FEDERAL WAY
31 MASON COUNTY
32 LEWIS COUNTY
33 EDMONDS
34 LACEY
35 BREMERTON
36 PUYALLUP
37 COWLITZ COUNTY
38 BLAINE
39 MERCER ISLAND
40 GRAYS HARBOR COUNTY
41 SNOHOMISH CITY
2700 County
3100 County
1800 County
3700 County
3400 County
3200 County
300 County
600 County
1704 City
1500 County
2717 City
3210 City
3900 County
3403 City
0302 City
0304 City
2900 County
0605 City
3701 City
1725 City
1300 County
1706 City
1716 City
500 County
1724 City
1900 County
1739 City
1732 City
2300 County
2100 County
3104 City
3402 City
1801 City
2711 City
800 County
3702 City
1719 City
1400 County
3115 City
$643,654.41
$569,764.22
$401,480.1
$361,468.20
$325,201.54
$324,573.02
$229,188.11
$213,605.94
$182,011.29
$179,898.61
$174,219.63
$173,009.74
$166,286.76
$163,353.91
$142,205.93
$137,445.60
$133,553.48
$132,861.49
$131,767.62
$130,875.13
$128,560.40
$122,857.10
$119,511.68
$119,479.23
$116,843.66
$108,845.23
$107,304.38
$106,353.17
$102,618.43
$99,487.62
$88,532.73
$88,279.73
$86,098.24
$85,811.67
$81,680.54
$80,958.10
$80,056.71
$79,776.27
$78,185.99
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SSB 5883 Streamlines Sales Tax Report August 31, 2018
42 JEFFERSON COUNTY 1600 County
43 GIG HARBOR 2708 City
44 SHORELINE 1737 City
45 WALLA WALLA COUNTY 3600 County
46 PULLMAN 3812 City
47 OKANOGAN COUNTY 2400 County
48 CHELAN COUNTY 400 County
49 YAKIMA CITY 3913 City
50 BAINBRIDGE ISLAND 1804 City
51 SAN JUAN COUNTY 2800 County
52 PORT ANGELES 0502 City
53 STEVENS COUNTY 3300 County
54 OAK HARBOR 1503 City
55 WHITMAN COUNTY 3800 County
56 SNOQUALMIE 1728 City
57 MAPLE VALLEY 1720 City
58 WALLA WALLA CITY 3604 City
59 LAKE STEVENS 3109 City
60 DOUGLAS COUNTY 900 County
61 BURIEN 1734 City
62 ANACORTES 2901 City
63 ELLENSBURG 1902 City
64 MOUNT VERNON 2907 City
65 FRANKLIN COUNTY 1100 County
66 UNIVERSITY PLACE 2719 City
67 PORT TOWNSEND 1601 City
68 EAST WENATCHEE 0902 City
69 MUKILTEO 3114 City
70 SEATAC 1733 City
71 TUMWATER 3406 City
72 LONG VIEW 0804 City
73 SPOKANE PUBLIC FACILITY Other
74 MOUNTLAKE TERRACE 3113 City
75 PACIFIC COUNTY 2500 County
76 POULSBO 1803 City
77 MARYSVILLE 3111 City
78 SHELTON 2301 City
79 BATTLE GROUND 0601 City
80 CAMAS 0602 City
$73,529.49
$73,133.45
$70,061.65
$69,067.20
$67,026.01
$66,330.80
$63,710.99
$63,025.12
$61,892.68
$61,204.99
$57,475.07
$56,268.15
$54,278.29
$52,301.42
$52,048.14
$51,594.91
$48,780.49
$48,667.73
$47,649.71
$46,588.45
$46,386.08
$46,381.26
$45,451.81
$44,637.99
$43,612.12
$43,093.32
$42,898.48
$42,105.69
$40,542 20
$39,197.95
$38,745.29
$38,128.94
$37,398.87
$36,629.82
$35,513.73
$34,976.86
$33,432.67
$33,346,19
$32,958.87
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SSB 5883 Streamlines Sales Tax Report August 31, 2018
81 MOSES LAKE 1309 City $32,449.23
82 ENUMCLAW 1711 City $31,130.36
83 COVINGTON 1712 City $31,001.74
84 DES MOINES 1709 City $30,382.70
85 STANWOOD 3116 City $30,233.65
86 QUINCY 1310 City $29,844.13
87 WEST RICHLAND 0305 City $28,644.13
88 CENTRALIA 2101 City $28,273.69
89 SELAH 3907 City $27,638.29
90 PORT ORCHARD 1802 City $26,886.23
91 PROSSER 0303 City $25,846.91
92 NORTH BEND 1722 City $25,807.73
93 PEND OREILLE COUNTY 2600 County $25,678.66
94 LINCOLN COUNTY 2200 County $24,681.37
95 ADAMS COUNTY 100 County $24,300.36
96 EPHRATA 1303 City $24,119.57
97 LAKEWOOD 2721 City $23,698.47
98 MILL CREEK 3119 City $23,484.50
99 DUVALL 1710 City $23,090.14
100 WASHOUGAL 0606 City $22,952.55
101 SEQUIM 0503 City $21,672.20
102 BONNEY LAKE 2701 City $20,475.33
103 KLICKITAT COUNTY 2000 County $20,402.63
104 KENMORE 1738 City $20,350.27
105 DUPONT 2704 City $19,639.75
106 WENATCHEE 0405 City $17,637.33
107 NEWCASTLE 1736 City $17,282.55
Public
Facilities
108 FOOTBALL District $17,093.71
109 YELM 3407 City $16,588.86
110 ABERDEEN 1401 City $16,555.10
111 STEILACOOM 2715 City $16,521.45
112 MEDINA 1718 City $16,180.51
113 SUMAS 3707 City $16,093.05
114 CLARKSTON 0202 City $16,047.78
115 ORTING 2710 City $15,981.87
116 FERRY COUNTY 1000 County $15,907.14
117 COLLEGE PLACE 3601 City $15,697.84
118 CHELAN CITY 0402 City $15,511.75 -
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SSB 5883 Streamlines Sales Tax Report August 31, 2018
119 LAKE FOREST PARK 1717 City $14,856.94
120 ASOTIN COUNTY 200 County $13,755.74
121 MONTESANO 1406 City $12,853.28
122 BENTON CITY 0301 City $12,765.27
123 FRIDAY HARBOR 2801 City $12,469.82
124 NORMANDY PARK 1721 City $12,290.65
125 BUCKLEY 2702 City $12,128.66
126 WAPATO 3912 City $11,762.23
127 COUPEVILLE 1501 City $11,729.88
128 KELSO 0803 City $11,415.08
129 FIRCREST 2707 City $11,211.63
130 SKAMANIA COUNTY 3000 County $11,152.33
131 GOLDENDALE 2002 City $11,054.86
132 CLYDE HILL 1708 City $10,854.28
133 EDGEWOOD 2720 City $10,776.08
134 CLE ELUM 1901 City $10,753.88
135 CHENEY 3202 City $10,728.23
136 ZILLAH 3914 City $10,504.25
137 OROVILLE 2408 City $10,392.46
138 OCEAN SHORES 1409 City $10,150.01
139 LANGLEY 1502 City $9,937.41
140 MATTAWA 1308 City $9,898,83
141 BRIER 3102 City $9,892.22
142 EATONVILLE 2705 City $9,838.47
143 ROYAL CITY 1311 City $9,798.83
144 COLFAX 3802 City $9,730.17
145 BREWSTER 2401 City $9,625.12
146 NEWPORT 2605 City $9,182.58
147 BLACK DIAMOND 1705 City $9,123.66
148 COLUMBIA COUNTY 700 County $8,977.99
149 CASHMERE 0401 City $8,905.61
150 SULTAN 3117 City $8,841.00
151 KALAMA 0802 City $8,521.36
152 CONNELL 1101 City $8,343.08
153 EVERSON 3703 City $8,314.28
154 GRANITE FALLS 3107 City $7,970.66
155 CARNATION 1707 City $7,882.88
156 LEAVENWORTH 0404 City $7,879.29
157 LA CONNER 2905 City $7,640.26
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SSB 5883 Streamlines Sales Tax Report August 31, 2018
158 TENINO 3405 City
159 FORKS 0501 City
160 WAHKIAKUM COUNTY 3500 County
161 OMAK 2407 City
162 WESTPORT 1408 City
163 CHEWELAH 3301 City
164 RAYMOND 2503 City
165 GRANDVIEW 3901 City
166 AIRWAY HEIGHTS 3201 City
167 DAYTON 0701 City
168 MESA 1103 City
169 WARDEN 1313 City
170 TWISP 2412 City
171 DAVENPORT 2203 City
172 SUNNYSIDE 3908 City
173 KETTLE FALLS 3303 City
174 CHEHALIS 2102 City
175 WHITE SALMON 2003 City
176 TONASKET 2411 City
177 BEAUX ARTS VILLAGE 1703 City
178 CASTLE ROCK 0801 City
179 ROY 2712 City
180 CONCRETE 2903 City
181 REPUBLIC 1001 City
182 NAPAVINE 2105 City
183 MABTON 3904 City
184 WOODLAND 0805 City
185 MCCLEARY 1405 City
186 LA CENTER 0603 City
187 RAINIER 3404 City
188 DARRINGTON 3103 City
189 ROSLYN 1904 City
190 GRANGER 3902 City
191 SOUTH BEND 2504 City
192 YARROW POINT 1730 City
193 TIETON 3909 City
194 CATHLAMET 3501 City
195 MEDICAL LAKE 3206 City
196 GOLD BAR 3106 City
$7,161.21
$6,963.23
$6,740.97
$6,652.02
$6,571.89
$6,528.80
$6,496.84
$6,447.68
$6,403.46
$6,268.99
$6,227.30
$6,139.17
$6,063.85
$5,822.74
$5,723.30
$5,713.96
$5,573.66
$5,543.41
$5,438.64
$5,334.88
$5,333.48
$5,203.51
$5,176.57
$5,033.11
$5,022.19
$4,940.17
$4,865.65
$4,859.46
$4,739.23
$4,722.15
$4,492.47
$4,464.26
$4,443.52
$4,230.50
$4,161.62
$4,132.49
$4, 098 93
$3,942.47
$3,758.58
33 I l' a e. c
61
SSB 5883 Streamlines Sales Tax Report August 31, 2018
197 RUSTON 2713 City
198 WOODWAY 3118 City
199 RITZVILLE 0104 City
200 TOLEDO 2107 City
201 ENTIAT 0403 City
202 WINTHROP 2413 City
203 ILWACO 2501 City
204 YACOLT 0607 City
205 NACHES 3906 City
206 PRESCOTT 3602 City
207 SOAP LAKE 1312 City
208 KITTITAS CITY 1903 City
209 ROSALIA 3813 City
210 OKANOGAN CITY 2406 City
211 WINLOCK 2109 City
212 GRAND COULEE 1305 City
213 HARRAH 3903 City
214 IONE 2602 City
215 BRIDGEPORT 0901 City
216 ODESSA 2205 City
217 GEORGE 1304 City
218 BINGEN 2001 City
219 STEVENSON 3002 City
220 PATEROS 2409 City
221 WATERVILLE 0905 City
222 WILBUR 2208 City
223 COWLITZ PFD COLUMBIA THEATRE Other
224 METALINE FALLS 2604 City
225 ELMA 1403 City
226 COLVILLE 3302 City
227 FERNDALE 3704 City
228 GARFIELD COUNTY 1200 County
229 WAITSBURG 3603 City
230 YAKIMA PFD CAPITOL THEATRE Other
231 SKYKOMISH 1727 City
232 HUNTS POINT 1713 City
233 LIND 0102 City
234 PALOUSE 3811 City
235 COSMOPOLIS 1402 City
$3,748.60
$3,719.72
$3,702.92
$3,561.56
$3,528.01
$3,446.66
$3,299.78
$2,998.12
$2,995.60
$2,954.17
$2,872.85
$2,855.56
$2,820.20
$2,805.16
$2,778.20
$2,730.16
$2,725.42
$2,599.28
$2,578.88
$2,538.79
$2,485.45
$2,457.35
$2,451.39
$2,400.55
$2,334.58
$2,300.13
$2,289.12
$2,272.97
$2,268.75
$2,215.92
$2,135.09
$2,112.88
$2,064.97
$2,032.50
$1,998.78
$1,989.03
$1,876.27
$1,868.24
$1,822.08
34 I I' a g e
62
SSB 5883 Streamlines Sales Tax Report
236 OAKVILLE
237 UNION GAP
238 TEKOA
239 POMEROY
240 REARDAN
241 ELECTRIC CITY
242 NORTHPORT
243 SOUTH CLE SLUM
244 DEER PARK
245 COULEE DAM
246 SOUTH PRAIRIE
247 EVERETT
248 MOSSYROCK
249 RIDGEFIELD
250 MANSFIELD
251 SPRINGDALE
252 ARLINGTON
253 CARBONADO
254 ALMIRA
255 NORTH BONNEVILLE
256 CUSICK
257 HAMILTON
258 COLTON
259 WILKESON
260 BUCODA
261 MILLWOOD
262 SEDRO WOOLLEY
263 CRESTON
264 ASOTIN CITY
265 PE ELL
266 GARFIELD
267 ENDICOTT
268 MOXEE CITY
269 LYMAN
270 ROCK ISLAND
271 SPRAGUE
272 VADER
273 WASHTUCNA
274 RIVERSIDE
2206
1302
3305
1905
3203
2403
2714
3105
2104
0604
0903
3306
3101
2703
2201
3001
2601
2904
3803
2718
3401
3207
2908
2202
0201
2106
3806
3804
3905
2906
0904
2207
2108
0105
2410
1407 City
3911
3815
City
City
201 City
City
City
City
City
City
City
City
City
City
City
City
City
City
City
City
City
City
City
City
City
City
City
City
City
City
City
City
City
City
City
City
City
City
City
City
$1,739.27
$1,678.23
$1,612.59
$1,603.20
$1,569.66
$1,490.77
$1,426.53
$1,422.04
$1,361.09
$1,343.07
$1,334.95
$1,306.60
$1,283.40
$1,212.06
$1,123.27
$1,082.69
$1,074.35
$1,064.92
$1,053.34
$1,052.34
$1,043.40
$1,015.05
$948.50
$944.93
$930.20
$924.43
$902.08
$893.77
$861.19
$827.10
$804.73
$784.00
$747.51
$722.37
$697.64
$695.09
$655.47
$647.06
$645.82
August 31, 2018
35IPiii e
63
SSB 5883 Streamlines Sales Tax Report August 31, 2018
275 HARTLINE
276 WILSON CREEK
277 NESPELEM
278 FARMINGTON
279 KAHLOTUS
280 OAKESDALE
281 HARRINGTON
282 HATTON
283 SPANGLE
284 ROCKFORD
285 INDEX
286 ALBION
287 ELMER CITY
288 CONCONULLY
289 MALDEN
290 LACROSSE
291 MARCUS
292 UNIONTOWN
293 MORTON
294 LAMONT
295 METALINE
296 STARBUCK
297 WAVERLY
298 KRUPP
1306 City
1315 City
2405 City
3805 City
1102 City
3810 City
2204 City
0101 City
3209 City
3208 City
3108 City
3801 City
2404 City
2402 City
3809 City
3807 City
3304 City
3816 City
2103 City
3808 City
2603 City
0702 City
3211 City
1307 City
$560.22
$540.22
$529.33
$515.46
$457.21
$424.08
$377.79
$369.90
$330.71
$325.61
$321.97
$314.77
$309.01
$286.81
$225.43
$199.58
$190.50
$185.06
$173.94
$166.88
$155.84
$128.07
$72.83
$40.60
Total Jurisdictions Not Receiving.
Payments
$12;537,745.15
Net Sourcing Impacts (Includes Reductions for Voluntary Compliance
and WA Marketplace Fairness Act))
$10,049,642.01
36IPage
64