Last Tuesday, the Washington state Senate passed ESHB 2075, the digital goods tax bill by a vote of 28-20. What does the bill mean to you?
The bill that requires sellers of digital goods and “digital automated services” to collect sales tax on Washington consumers for such items as ringtones, digital music, digital audio and video, digital books as well as web services such as online expense reporting, online subscriptions of all types and other online services where an end user pays for an item that is a digital product or service. Nothing changes if an online business receives advertising revenue.
There are a number of exemptions for business use of digital goods, although not complete.
For sellers of digital products, the B&O tax rate drops from 1.5% to .471%, which is about 68% lower. There are a number of other provisions including an amnesty for uncollected sales tax on sales that were deemed by the Dept. of Revenue to be equivalent to tangible personal property.
The Washington Technology Industry Association (WTIA) announced it will be working with the Dept. of Revenue to help companies comply with the new law. Workshops and seminars are being planned.
The bill as it passed the legislature is online at http://www.washingtontechnology.org/community/blogs/wsagovtaffairs/attachment/514.ashx