Washington Senate Bill Report ESHB 1521 (March 9, 2021)
- Issuer
- Congressional materials
- Document type
- Report
- Date
- 2021-03-11
- Case
- 2021 03 11 A28695 D230976 Bill Report 1521 S E Sba Bfst 21
Summary
A Senate Bill Report on ESHB 1521, an act relating to supporting warehousing and manufacturing job centers, prepared for the Senate Committee on Business, Financial Services & Trade as of March 9, 2021. It records that the bill passed the House on 3/3/21 by 97-0 and had committee activity on 3/11/21. The background section describes retail sales and use taxes, nexus, the Streamlined Sales and Use Tax Agreement (SSUTA) and its mitigation account, and EHB 1948, which the Governor vetoed on April 3, 2020. The bill summary states that cities that received a quarterly mitigation payment of at least $60,000 on June 30, 2020 would receive quarterly payments from the Manufacturing and Warehousing Job Centers Account beginning July 1, 2021, reduced by 20 percent a year beginning July 1, 2022, with payments ending July 1, 2026. It lists no appropriation and notes a fiscal note is available.
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Full text
SENATE BILL REPORT
ESHB 1521
As of March 9, 2021
Title: An act relating to supporting warehousing and manufacturing job centers.
Brief Description: Supporting warehousing and manufacturing job centers.
Sponsors: House Committee on Finance (originally sponsored by Representatives Entenman,
Sullivan, Callan, Jacobsen, Taylor, Stokesbary, Gregerson and Ormsby).
Brief History: Passed House: 3/3/21, 97-0.
Committee Activity: Business, Financial Services & Trade: 3/11/21.
Brief Summary of Bill
• Creates the Manufacturing and Warehousing Job Centers Account.
• Provides for mitigation payments for the support of manufacturing and
job centers in manufacturing and warehousing qualified local taxing
districts negatively impacted by the Streamlined Sales and Use Tax
Agreement.
SENATE COMMITTEE ON BUSINESS, FINANCIAL SERVICES & TRADE
Staff: Clinton McCarthy (786-7319)
Background: Retail Sales and Use Tax. Retail sales taxes are imposed on retail sales of
most articles of tangible personal property, digital products, and some services. A retail
sale is a sale to the final consumer or end user of the property, digital product, or service. If
retail sales taxes were not collected when the user acquired the property, digital product, or
service, then use tax applies to the value of the property, digital product, or service when
used in this state. The state, all counties, and all cities levy retail sales and use taxes. The
state sales and use tax rate is 6.5 percent. Local sales and use tax rates vary from 0.5
percent to 3.9 percent, depending on the location.
This analysis was prepared by non-partisan legislative staff for the use of legislative
members in their deliberations. This analysis is not part of the legislation nor does it
constitute a statement of legislative intent.
Senate Bill Report -1- ESHB 1521
Nexus. Nexus is required before a taxing jurisdiction can impose taxes on an entity. In the
case of retail sales taxes, nexus is necessary in determining whether an out-of-state business
selling products into a state is liable for collecting retail sales taxes for that state. As the
result of a United States Supreme Court decision, Washington adopted requirements
imposing retail sales tax collection requirements, as well as business and occupation tax
obligations, on out-of-state sellers.
Streamlined Sales and Use Tax Agreement. In 2007, legislation was enacted fully adopting
the Streamlined Sales and Use Tax Agreement (SSUTA).
The SSUTA includes provisions for determining where a sale is deemed to occur for local
sales and use tax purposes. As part of the legislation, the Streamlined Sales and Use Tax
Mitigation Account was created to mitigate the effect of the change in sourcing rules to
negatively impacted local jurisdictions. Each July 1st, the state treasurer must transfer an
amount determined by the Department of Revenue (DOR) to fully mitigate negatively
impacted local jurisdictions. DOR determines each local jurisdiction's annual losses.
Distributions are made quarterly representing one-fourth of a jurisdiction's annual loss, less
voluntary compliance revenue from the previous quarter.
In 2017, the Legislature repealed local mitigation payments, effective October 1, 2019.
Until that time, payments must be adjusted to reflect the impact of marketplace fairness on
local tax revenues and will be made only to cities, counties, and public facilities districts.
Selected jurisdictions may have qualified for mitigation payments under the 2019-2021
omnibus operating budget.
House Bill 1948. During the 2020 session, the Legislature passed EHB 1948. Under EHB
1948, qualified local taxing districts negatively impacted by the SSUTA receive annual
mitigation payments each July 1st. To qualify, a local taxing district must be a city and
have received a mitigation payment of at least $150,000 in calendar year 2018 from the
Streamlined Sales and Use Tax Mitigation Account (mitigation account). In addition, the
taxing district must continue to have local sales tax revenue loss due to the sourcing
provisions in the SSUTA.
Beginning July 1, 2020, DOR must calculate each qualified taxing district's annual loss.
The annual loss is calculated by comparing at least 12 months of tax return data from before
and after July 1, 2008. Each quarter, distributions are made from the Warehousing and
Manufacturing Jobs Center Account (account) created in this act. Distributions from the
account will be an amount equal to one-fourth of the taxing district's annual loss. DOR will
reduce this amount by the voluntary compliance revenue and marketplace fairness revenue.
On April 3, 2020, the Governor fully vetoed EHB 1948. In the veto statement, the
Governor cited dramatically changed circumstances resulting from the COVID-19
pandemic since the Legislature's approval of the 2020 supplemental operating budget.
Senate Bill Report -2- ESHB 1521
Summary of Bill: Qualified local taxing districts negatively impacted by the SSUTA may
receive annual mitigation payments each July 1st. To qualify, a local taxing district must be
a city and have received a quarterly streamlined sales tax mitigation payment of at least
$60,000 on June 30, 2020.
Beginning July 1, 2021, DOR must provide each qualified local taxing district a quarterly
mitigation payment equal to the payment provided to that taxing district on June 30, 2020.
Beginning July 1, 2022, the amount of the quarterly mitigation payments must be reduced
by 20 percent from the previous year's payment that same quarter for each qualified local
taxing district.
The quarterly distribution must be made from the account. Expenditures from the account
may be used only for mitigating the negative fiscal impacts to local taxing jurisdictions as
the result of sourcing changes from the SSUTA.
Payments end July 1, 2026.
Appropriation: None.
Fiscal Note: Available.
Creates Committee/Commission/Task Force that includes Legislative members: No.
Effective Date: Ninety days after adjournment of session in which bill is passed.
Senate Bill Report -3- ESHB 1521
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- Original
- app.leg.wa.gov