Two bills sponsored by Sen. Steve Hobbs, SB 5855 and 5856 will establish the Main Street Fairness Act, which will ensure that internet-based businesses are subject to the same taxes paid by small businesses in Washington state.
The money raised will go toward safety net programs to help the homeless and our state’s most vulnerable people, while also possibly freeing up additional money to fund K-12 education.
“Our state’s tax structure is broken,” Hobbs said. “This bill will level the playing field for small businesses in our state by creating equity between internet retailers and mom and pop stores in every community throughout Washington.
“This is also an opportunity to strengthen the safety net,” Hobbs added. “Many of our friends and neighbors have been left behind and just a modest investment in some of these programs that help folks get back on their feet are dangerously underfunded. This bill will help fix that.”
Right now there is no uniform function for the state to collect sales tax on sales completed over the internet, making on-line sales that much more attractive to consumers than transactions that take place in person. Hobbs’ bill establishes a nexus that captures internet sales tax for transactions through companies based in Washington. For example, if a seller in Indiana sells a book to someone in Washington through an online seller with a physical presence in our state, that transaction will now be subject to sales tax.
Don Forbis has owned Games Plus, a tabletop gaming business, for 32 years, the last seven in Lake Stevens. Forbis has survived despite internet competition, but said that Hobbs bill will help small businesses like his better compete on a day-to-day basis.
“Online competition is taking more and more of my business. They don’t have a storefront and don’t charge sales tax on top of that, it makes it really difficult to compete,” Forbis said. “I think this will help level the playing field. I’m very enthusiastic about the whole thing.”
Sen. Mark Mullet, D-Issaquah, a co-sponsor of the bill and a small business owner himself, said he believes the bill will serve as another tool to make small businesses more competitive.
“Small businesses are the backbone of our state’s economy,” said Mullet. “As a small business owner, I personally experience the pressure of our state’s upside-down, broken tax code. Closing this unnecessary tax loophole levels the playing field and allows small businesses on Main Street to continue driving our economy.”
Mullet added that this bill is important because it could also free up money to help fund basic education.
Sen. Dean Takko, D- Longview, who is also co-sponsoring the bill added, “This is an opportunity to support the brick and mortar stores in our communities who don’t have a billion dollar online presence to deliver goods and services.
“An internet sales tax strikes a balance that can help our corner shops and seaside businesses stay competitive.”