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Thursday, July 1, 2010

Harder Times in Washington State.

Taxes went up this morning in Washington State. Did you feel it? Thanks, Olympia Democrats.

Not all increases were exactly a tax, but an increase in fees. Either way, the government is still fishing around in your pocket.

2 liters of of your favorite carbonated beverage went up 6¢. Safeway didn't raise the price, Gregoire did.

Sales of bottled water are subject to the retail sales tax. Seems bottles bug the Democrats in Olympia.

Candy and gum sales tax exemption is repealed. To make matters more complicated, the legislature made a distinction between certain types of candies.
Olympia's new definition of candy:

Candy is a preparation of sugar, honey, or other natural or artificial sweeteners combined with chocolate, fruits, nuts, or other ingredients or flavorings and formed into bars, drops, or pieces. Candy does not require refrigeration. Candy does not include any preparation containing flour.

Flour is made from grain such as wheat, rice, corn, rye, oats, and barley. Flour does not include flour substitutes, such as starch. Any product that lists flour as an ingredient on the nutritional facts label is not taxable as candy.


Whew.
If a city located within an Regional Transportation Authority (tax district) annexes unincorporated territory, the annexed territory is simultaneously included within the RTA and subject to all RTA taxes, liabilities, and obligations applicable to the city.

Natural gas sold by a brokered agreement is subject to a use tax in effect where the gas is burned or stored. Storage of a consumable is treated as the end use of the consumable. It makes no sense at all.

Food production will be taxed. The following use of sales taxes are imposed for materials used in dairy production.
  • licensed dairies with a certified dairy nutrient plan,
  • animal feeding operations that have a waste disposal permit issued under RCW 90.48, and
  • animal feeding operations that have a nutrient management plan approved by a conservation district meeting certain requirements.
This is an indirect tax on food. I have yet to sort out what the increase will mean to food prices, but they will go up.

The Legislature holds the chief executive and the chief financial officer strictly liable for collected but unremitted sales tax regardless of fault or whether those individuals were aware of the unpaid tax liability (2ESSB 6143 Section 801). I work with a store whose trusted employee took all the money in the sales tax payment account. The first the rest of us found out about it was when the state finally notified us our account was delinquent. Under the new law, the store owner would be held accountable despite the fact he was a victim of the crime. That's wrong.

The bad debt credit or deduction is limited to the original retail seller. That ought to kill the loan market.

Businesses with reportable Business and Occupancy income of over $50,000 per year will see increases of B&O tax 0.3 % bringing the rate up to as much as 1.93 %

A business "nexus" tax imposed. If you do any business in Washington State, you will be taxed for it. The laws here are very murky, but seem to be pointed at Boeing and similar businesses.

Direct sellers B&O tax exemption is repealed.
Property management salary B&O tax exemption repealed. That ought to catch a bunch of old folks by surprise.

High risk mortgage deductions for banks are now limited. This will hit the loan market for first time home buyers.

Compensation paid to members of corporate boards of directors is taxed as a service.

Private purchasers of privately owned timber must report the purchase to the Revenue Department, presumably for taxation.

For you tobacco users:
  • The cigarette tax increased $1.00 to $3.025 on a package of 20 cigarettes.
  • The tax on Other Tobacco Products (except little cigars and moist snuff) increases from 75 to 95 percent of taxable sales price (equivalent to a 95% tax rate), with the cap per cigar increasing from 50 to 65 cents.
  • Little cigars become a separate category of OTP, taxed at the same rate as cigarettes.
  • Moist snuff also becomes a separate category of OTP but continues to be taxed at 75 percent until October 1,2010, when it will be taxed at the greater of $2.526 or 83.5 percent of the cigarette tax on each single unit of 1.2 ounces or less and proportionately on larger units.
RCW Ch 82.02 to allow local government to impose impact fees for high density urban development.
VOiP is taxed under the Enhanced 911 tax. 25¢ per line (per month).

Increased the tax on beer.
A tax increase on beer! Olympia is getting greedy.

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This information is abstracted from http://dor.wa.gov/Docs/Reports/2010/Summary_2010_Tax_Leg/2010LegSummary.pdf

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