The Department calculates the SST Mitigation payments and provides those amounts to the State Treasurer. The State Treasurer determines the process for shortfalls between the appropriation and the payments.
No. Assuming that “Estimated Remote Sales Tax Revenue” means the marketplace facilitator/remote seller revenue defined in Part IV of EHB 2163, the voluntary compliance revenue received under SSUTA is separate from the marketplace facilitator/remote seller revenue. The Department will ensure the same revenue is not included in both SST Mitigation payment offsets.
The Department used industry data and U.S. Census Bureau data to estimate Washington remote sales revenues. From the state sales tax estimate, we derived the total local sales tax impact by applying an average local tax rate. The Department’s standard average local tax rate value for Legislative Session 2017 was 2.5355 percent.
We estimated the local sales tax impact by local jurisdiction by using a relevant subset of local tax distributions from 2015 and 2016 to estimate future local distributions of new sales tax revenue from this legislation. We made an adjustment for the then future increase of Sound Transit's tax rate from 0.9 percent to 1.4 percent. Finally, we excluded taxable activities that are unrelated to remote sales, such as lodging taxes from the relevant subset of local tax distributions data.
Yes. The Department will provide each jurisdiction the amount of marketplace facilitator/remote seller revenue – as we do with the voluntary compliance revenue as part of the SST Mitigation payment files.
Yes. Information from remote sellers and marketplace facilitators will be included in the local tax distribution files.
The Department began strategizing an ongoing communication and enforcement plan shortly after the passage of EHB 2163. Educational letters are being sent to both registered and unregistered taxpayers, and our website (dor.wa.gov) contains a wealth of information on the effects on the new legislation. This information is being updated regularly. The agency also has an ongoing tax discovery program that is designed to educate the public about its tax obligations, and to assist them in becoming compliant with state tax laws.
The Department has developed a method to identify marketplace facilitators/remote sellers in order to calculate mitigation payments. Information from remote sellers and marketplace facilitators will be included in the local tax distribution files (available from the DOR Fortress Online portal); however, the businesses will not be identified as marketplace facilitators/remote sellers.
The legislation does not explain why a reconciliation is necessary.
Yes. The marketplace facilitator/remote seller revenue will be based on actual taxpayer reporting.
The amount of risk relates to the amount of consumer use tax reported annually in April for activities occurring in the prior year.
The State/Department will defend it:
Unless the court places an injunction on the state implementing EHB2163, the Department will continue to administer and enforce the law enacted in the bill.
Generally speaking, sales tax remitted to the Department is deposited into the General Fund. Thus, the Department does not hold onto the tax pending the outcome of litigation. Should the plaintiff(s) prevail, the Court may order the Department to provide refunds. However, it is difficult to speculate as to possible remedies, which will depend on the specific details and scope of the litigation, if and where it were to happen.
Without the specific details and scope of the potential litigation, the Department declines to speculate as to possible remedies.