Study of the Taxation of Electronically Delivered Products

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Digital Goods Study of the Taxation of Electronically Delivered Products

SHB 1128 (chapter 522, Laws of 2007, P.V.) directs the Department of Revenue, with the assistance of a committee to study the taxation of electronically delivered products.

Information about the Digital Products Bill (ESHB 2075)

Committee Responsibilities

The legislation directs the committee to review:

The provision of explicit statutory definitions for electronically delivered products;
The current excise tax treatment of electronically delivered products in the state of Washington and other 38 states as well as the tax treatment of these products under the streamlined sales and use tax agreement;
The administration, costs, and potential recipients of the tax exemptions provided in chapter ESHB 1981; and
Alternatives to the excise taxation of electronically delivered products.

In addition, the committee must present two reports to the Senate Ways and Means and House Finance Committees. The first, a preliminary report, was presented to the Legislature on November 30, 2007. The second and final report is due by September 1, 2008.

Committee Members

The legislation directs the appointment of committee members representing the Legislature, government, academia, and business community.
Legislative Representation	Representative Ross Hunter (Chair) Senator Joe Zarelli (Vice Chair) Senator Derek Kilmer Representative Ed Orcutt

State and Local Government Representation	Jim Justin (Association of Washington Cities) Julie Murray (Washington Association of Counties) Victor Moore (Office of Financial Management) Cindi Holmstrom (Director, Department of Revenue)

Academic Representation	Gregory Silverman(Seattle University, School of Law) Ben Kim(Albers School of Business and Economics, Seattle University)

Business Representation	Rich Prem (Amazon.com) Bruce Reid (Microsoft Corporation) Ron Bueing (Association of Washington Business) Chuck Robinson (Village Books, Bellingham, WA) Paula Borhauer (Starbucks) Steve Collier (Safeco)

Committee Reports

Study of the Taxation of Electronically Delivered Products	Final report Cover Letter

Letter to Representative Ross Hunter, Chair, House Finance Committee, and Senator Margarita Prentice, Chair, Senate Ways & Means Committee Cover e-mail to Representative Ross Hunter and Senator Margarita Prentice Cover e-mail to committee members of the Committee for the Study of the Taxation of Electronically Delivered Products	The Study Committee has worked diligently to understand the issues surrounding the taxation of electronically delivered products. The scope and difficulty of the task precluded the Committee from meeting the September 1st deadline for production of a final report. A letter, intended to serve an interim substitute for the final report, has been sent to the chairs of the House Finance and Senate Ways & Means Committees. The letter summarizes the Study Committee's activities to date, explains why the final report could not be produced at this time, and provides the Study Committee's future plans.

Preliminary Committee Report	SHB 1128 requires the committee to report its preliminary findings and recommendations to the House Finance Committee and the Senate Ways and Means Committee by November 30, 2007. This preliminary report encompasses: Legislative Background and Terminology; Problem Statement; Vision and Goals Statement; Department of Revenue Interpretation of Current Law; Association of Washington Business Interpretation of Current Law; Tax Treatment by Other Jurisdictions of Electronically Delivered Products; and Future Objectives and Work Plan.

Study of the Taxation of Electronically Delivered Products	During its November 30, 2007 work session, the House Finance Committee listened to a report on the progress of the Electronically Delivered Products/Digital Products Study. Listen to or view the audio or video recording of the report on TVW. The recording begins at the 52 minute mark and lasts approximately 30 minutes.

2008 Meeting Schedule

	Date, Time		Location
	Tuesday, November 25, 2008 3:00 p.m. to 4:00 p.m.		Special Telephonic Meeting Department of Revenue 5th Floor Executive Conference Room Capital Plaza Building 1025 Union Ave S.E. Olympia, WA Telephone Number: (360) 407-3780 Enter Pin Number: 425478#

	Thursday, November 20, 2008 through Monday, November 24, 2008		Special Electronic Meeting

	Tuesday, November 18, 2008 10:00 a.m. – 3:00 p.m		John O’Brien Building - Hearing Room D Capital Campus, Olympia, WA

	Thursday, October 30, 2008 10:00 a.m. – 3:00 p.m		John O’Brien Building - Hearing Room D Capital Campus, Olympia, WA

	Thursday, September 25, 2008 10:00 a.m. – 3:00 p.m		John O’Brien Building - Hearing Room D Capital Campus, Olympia, WA

	Thursday, August 28, 2008 10:00 a.m. – 3:00 p.m.		Meeting Cancelled

	Meeting rescheduled: ~~Thursday, July 31, 2008~~ Tuesday, Aug 12, 2008 10:00 a.m. – 3:00 p.m.		John O’Brien Building - Hearing Room D Capital Campus, Olympia, WA

	Thursday, June 19, 2008		Meeting Cancelled

	Thursday, May 29, 2008 10:00 a.m. – 3:00 p.m.		John O’Brien Building - Hearing Room D Capital Campus, Olympia, WA

	Thursday, April 24, 2008 10:00 a.m. – 3:00 p.m.		John O’Brien Building - Hearing Room D Capital Campus, Olympia, WA

Meeting notices filed for inclusion in the Washington State Register

Documents

November 25, 2008
Agenda	Minutes	Handouts Notice of Special Telephonic Meeting Study Final Report (revised draft) Conclusions memo Committee E-Mails Ross Hunter November 25, 2008 9:37 a.m. Steve Collier November 25, 2008 11:01 a.m. Bruce Reid November 25, 2008 12:27 p.m. Julie Murray November 25, 2008 1:26 p.m.	Written Public Comment

November 20-24, 2008
See the special meeting page.

November 18, 2008
Agenda	Minutes	Handouts Suggested Changes by Paula Borhauer, Committee Member Draft Final Report

October 30, 2008
Agenda	Minutes	Handouts Specific Implementation Proposal. Draft Language for Major Provisions of a Digital Goods Bill - Changes Based on September 25th Discussion, Presented by Gil Brewer and Dylan Waits, Department of Revenue Staff. Issues from September 25, 2008, for Discussion on October 30, 2008, Presented by Gil Brewer and Dylan Waits, Department of Revenue Staff. Draft Outline of Final Report Additional Draft Language, changes presented by Gil Brewer, Legislative and External Affairs Liaison, and Dylan Waits, Tax Policy Specialist, Department of Revenue. Association of Washington Business (AWB), Legislative Objective - Digital Products Tax Policy, presented by Ron Bueing, Committee Member. AWB Draft Langauge for Major Provisions of a Digital Goods Bill, presented by Ron Bueing, Committee Member.

September 25, 2008
Agenda	Minutes	Handouts Draft Language for Major Provisions of a Digital Goods Bill - Presented by Drew Shirk, Project Counsel, and Mark Mullin, Legislative Counsel, Department of Revenue Additional Draft Language Estimates - Presented by Steve Smith, Tax Policy Specialist, Department of Revenue	Written Public Comment Additional Draft Language - Presented by Ralph Amons, Boeing (available soon)

August 12, 2008
Agenda	Minutes	Handouts Update to Fiscal Committees Digital Good Neutrality Proposal, presented by Chair Ross Hunter Possible Outline of Final Report

May 29, 2008
Agenda	Minutes	Handouts Committee Member Presentations: Tax Policy for Inputs to Digital Goods: Reproduction Rights in Digital Goods Distributed With or Without a Charge, presented by Bruce Reid Dynamic Information Delivered Electronically, presented by Steve Collier AWB Presentation on Digital Goods, presented by Ron Bueing Presentation by Paula Borhauer Final Report Proposal, presented by Julie Murray On the Taxation of Digital Goods and Services Delivered Over the Internet, presented by Gregory M. Silverman

April 24, 2008
Agenda E-Mail comment.	Minutes	Handouts E-Mail from Bruce Reid, Committee Member 50-State Survey of Taxation on Digital Products, presented by Dylan Waits, Tax Policy Specialist, Department of Revenue Although not part of the original handout, the 50 state survey is based in part on this list of citations. European Union's (EU) Taxation and Sourcing of Digital Products, presented by Dylan Waits, Tax Policy Specialist, Department of Revenue Canada's Taxation and Sourcing of Digital Products, presented by Dylan Waits, Tax Policy Specialist, Department of Revenue Potential Revenue Impacts, PowerPoint presentation by Steve Smith, Tax Policy Specialist, Department of Revenue	Written Public Comment Memorandum from the Washington Technology Association, dated April 23, 2008

November 15, 2007
Agenda	Minutes	Handouts Tax Treatment by Other Jurisdictions of Electronically Delivered Products, presented by Dylan Waits, Tax Policy Specialist, Department of Revenue

October 22, 2007
Agenda	Minutes (Amended and reapproved 4/24/08.)	Handouts Digital Products Overview, presented by Rich Prem, Vice President Indirect Taxes, Amazon.com. Digital Goods Decision Tree, presented by Dylan Waits, Department of Revenue.

October 2, 2007
Agenda	Minutes	Handouts SHB 1128 (chapter 522, Laws of 2007, P.V.) Section 136, subsection (3) Legal Requirements of Members & Committee, presented by JoAnne Gordon, Tax Policy Specialist, Department of Revenue.

Hearings: Audio Recordings

			Listen now Choose a meeting from the playlist. (The files are large and may take a minute to load.) Stand-alone player:

.MP3 Download
Date	Title	Length	Size
10/30/2008	Digital Goods HHR	3:34:32	98.2 MB
9/25/2008	Digital Goods	2:41:30	73.9 MB
8/12/2008	Digital Goods	2:58:43	81.8 MB
5/29/2008	Digital Goods HHR-D	4:06:55	115.7 MB
4/24/2008	Digital Goods Study	3:45:02	105.4 MB
11/15/2007	Digital Goods HHRA	2:41:10	75.5 MB
10/22/2007	Digital Goods Study	2:46:17	77.9 MB
10/02/2007	Digital Goods Mtg. Part 1	0:47:50	33.6 MB
10/02/2007	Digital Goods Mtg. Part 2	0:47:58	33.7 MB

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