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Figures released Thursday by the state Department of Revenue showed that taxes from retail sales, which make up nearly half of the $109 billion in taxable sales, rose about 5.3 percent. Mike Gowrylow, a department spokesman, said the drop in consumer-driven retail sales tax revenue bottomed out in 2011 and showed increases in all quarters of 2012. But “it’s not like a big boom,” he added.
Total sales were still well below the nearly $119 billion collected in 2007.
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Rep. Shirley Ringo and former gubernatorial nominee Robert Huntley are reviving a plan to cut the sales tax rate from 6 percent to 5 percent, while eliminating exemptions and expanding the tax to many services. They say new revenue — an estimated $371 million on top of current collections of just over $1 billion — should be directed to restoring funding to education, Medicaid and other programs subject to deep cuts in the past three years. … Their plan would retain the production exemption on sales of goods and equipment used by agriculture and other businesses and continue to exempt health care. But it would lift 21 exemptions and exceptions/Dan Popkey, Idaho Statesman. More here.
Question: What do you think of the sales tax reform proposed by Robert Huntley & Shirley Ringo?
A strong rebound in auto and truck sales boosted fourth-quarter sales tax revenues in Washington and the five most populous counties, the Department of Revenue reported today.
Retail sales for the October-December period rose 5.7 percent compared with 2009, to $12.9 billion
Retail trade sales, which include construction and other industrial sectors, climbed 5.8 percent from 2009, to $26.8 billion in the October-December period.
Total retail trade sales in Spokane County rose 1.7 percent to $926 million, but fell .7 percent in the City of Spokane, to $492 million.
The gains in retail sales were led by new and used car dealers, where revenues rose 11.7 percent compared with the 2009 quarter. Construction continued to be a drag, falling 6.8 percent.
Despite the increases over 2009, the department noted retail trade sales were below levels for 2007 and 2006. Overall retail sales remained below levels for the years 2005 through 2008.
- sales tax
Idaho’s January tax revenue likely beat forecasts by about $15 million. The news, which indicates the economy could be picking up steam, may help mitigate concerns that arose last week about a yawning $185 million budget hole.
Division of Financial Management director Wayne Hammon confirmed the preliminary figure to The Associated Press.
The robust January receipts come despite $9 million in unexpected sales tax rebates paid out to alternative energy companies. Still, this news likely won’t ease lawmakers’ job of determining what revenue figure to budget to when they set the 2012 spending plan, due to start next July 1.
For instance, legislators still must decide whether to synchronize Idaho’s tax code with new federal tax rules, a move that could cost Idaho an estimated $70 million over two years.
Even as dozens of Idahoans are testifying to JFAC that Idaho should look to more revenue - including, many have suggested, possibly taxing Internet sales - rather than cutting services to the disabled, House Speaker Lawerence Denney has single-handedly sidelined a bill that was moving along to open the door to future online taxes/Betsy Russell, Eye On Boise. More here.
- Medicaid hearing wraps up after 4 hours
- Testimony: Tax Internet services, don't cut services to disabled
- Testimony: 'A time to test our character”
Question: Should Internet sales be taxed to raise revenue for cash-strapped Idaho?
Washington's Department of Revenue said in a news release Monday that it has vastly improved the online tool retailers use to find sales tax rates across the state.
The state charges sales tax based on where a product is delivered, not where it originated. The new web tool, found at http://dor.wa.gov, offers several ways to look up location codes and tax rates. Those include address searches, improved maps, and latitude and longitude, according to the news release.
Washington retailers, you be the judge.
OLYMPIA – A special legislative session to address the state’s budget problems will continue until one side or the other blinks on the sales tax.
On one side: A majority of Democrats who control the Senate want to increase the sales tax as part of their plan to raise about $800 million in taxes as a balanced plan to close a projected $2.8 billion budget gap.
On the other side: A majority of Democrats who control the House of Representatives, and Gov. Chris Gregoire, who want to raise that money with other taxes.
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Early numbers aren’t looking good for Spokane and other local governments hoping to avoid more budget gloom.
Sales tax distributions for the first two months of 2010 were the lowest since 2005 for Spokane, Spokane County, Spokane Valley and the Spokane Transit Authority.
Because of the increased cost of doing business, largely from of salary increases and the spiking costs of health insurance, local governments usually need rising tax revenue to maintain services with the same number of employees.
Sales taxes are only one source of revenue, but they are a signficant one, especially for STA, which doesn’t have property or utility taxes.
OLYMPIA – A proposal to raise the state sales tax by 1 cent on the dollar, and tie it to high levels of unemployment, was introduced Thursday in the state House of Representatives.
Rep. Timm Ormsby, D-Spokane and one of the House Bill 3183’s 15 co-sponsors, calls it “an interesting concept”, even while conceding the sales tax is “a terrible revenue source.”
“I’m not crazy about the sales tax. But it’s one of the very few options available to the state,” he said.
The bill would raise the state’s share of the sales tax by 1 percent starting June 30, with 80 percent going to the state’s general fund, and most of the rest being set aside for roads and bridges. It would keep that extra penny per dollar in place until the state’s unemployment rate dropped to 6.5 percent for four straight months. The other half-cent would come off after the unemployment rate dropped to 5 percent.
Minutes after the bill was introduced, the Washington Policy Center, a conservative organization, was warning the sales tax could be in place for a long time. The state’s current unemployment rate is 9.5 percent and a tax increase of this magnitude could cost the state thousands more jobs, said Jason Mercier of the policy center.
Ormsby said the bill was introduced in the hope of getting a hearing in the House Ways and Means Committee and generating discussion: “I’ll be interested to see what kind of reaction is out there.”
There is no similar proposal in the Senate. Gov. Chris Gregoire has said she’d consider any options the Legislature sent her, but has not called for a sales tax increase.
All cuts, no new revenue. Thoughts?
- sales tax
This is an idea that legislative advocates should have had weeks ago: The folks at the private Washington State Budget and Policy Center have put together a handy online calculator to estimate how much a person would receive if the state working families tax rebate becomes reality.
The rebate is a key part of a proposed third-of-a-cent state sales tax increase. To offset the impact for low-income families, many Democrats are insisting on a rebate. It would be patterned on the federal Earned Income Tax Credit. If you get that, you’d get an extra 5 percent from the state.
Writes the policy center’s Jeff Chapman:
For example, a married couple with two kids and $20,000 in wages would receive $251 dollars. A single parent with one child would receive $152. The minimum credit for those who are eligible is $25.
The sales tax plan, which would steer hundreds of millions of dollars into hospitals, nursing homes and other health services if voters agree, is struggling to find support in the House in the final days of the legislative session. Republicans and some conservative Democrats argue that in a consumer-driven recession, it’s unwise to increase taxes.
A proposed billion-dollar sales tax hike barely cleared its first committee Tuesday, 8 votes to 7.
“We are at a time when people need our help,” said Rep. Eric Pettigrew, D-Seattle, urging lawmakers to support his plan. “The most vulnerable need us.”
If the House and Senate also approve, the proposal will appear on ballots in November for a statewide vote.
Republicans blasted the plan, saying Democratic budget writers should be scrubbing the budget more.
Rep. Joe Schmick suggested, for example, cutting state employees pay 2 percent or 3 percent, or by having them pay more than 12 percent of the cost of their health coverage.
“I’m here to tell you that Washington is hurting,” said Schmick, R-Colfax. “And they’re hurting because they’re overtaxed and they’re over-regulated.”
The proposed sales tax increase _ which works out to 3 cents on a $10 purchase _ would partly undue millions of dollars in looming budget cuts to hospitals, nursing homes and other health services.
“We have really gone over this budget,” Rep. Eileen Cody, D-Seattle, told Schmick. Sending the sales tax to voters, she said, gives the public a chance to undue some of the most serious cuts that lawmakers had to make.
Pettigrew noted that lawmakers weren’t voting to raise the tax, just to send it to voters to decide.
“It’s part of our effort to maintain our partnership with the public,” he said.
To offset the effect of the tax on the state’s poorest residents, the measure would also give a tax rebate averaging $100 to people who qualify for the federal Earned Income Tax Credit. This year, a family of four earning up to $43,415 would qualify. (NOTE: The amount of these rebates, however, was reduced from an earlier version of the bill, in order to steer millions of dollars more into the Basic Health Plan, mental health programs, vision/hearing services, and other health programs. The liberal Washington State Budget and Policy Center’s Schmudget blog has an excellent breakdown on the numbers before and after.
Some Republicans argue that the plan isn’t fair.
“You’re going to be taxing middle-income families struggling to get along and giving that money to lower-middle-class families,” said Rep. Doug Ericksen, R-Ferndale.
Rep. Mark Miloscia, D-Federal Way, crossed party lines to vote against the plan.
“I believe we are in the crisis of our generation and we are going to be judged on how we respond with real solutions,” he said.
Pettigrew said he agrees that sales tax, which hurts low-income people the most, is not ideal. But he said that lawmakers have few alternatives in the face of devastating cuts.
“When we go back to folks, I want to make sure I can look them in the eye…and say I’ve done everything possible to help you,” he said.
Stuff’s moving quickly, so here’s a quick overview of recent developments, etc:
-The polling came back Friday on a proposed third-of-a-cent sales tax hike, and the numbers prompted an on-again, off-again Saturday, with groups and lawmakers weighing whether to press ahead with a public vote on the plan.
“We weren’t sure (the numbers) were strong enough to go forward,” said Cassie Sauer, who’s part of a coalition of health groups (hospitals, nursing homes, a nurses union, SEIU). She wouldn’t give out numbers, although she said that the number of people supporting a tax increase was higher than those opposed. And the numbers were “through the roof” as far as public disapproval of cuts to pediatric health, hospitals, nursing, etc. But many people are clearly very worried about the economy, she said.
So is the health coalition still willing to back a campaign to win public support for the temporary tax increase, which would add $1.1 billion over three years? “We’re thinking about it,” said Sauer.
-The Washington Policy Center’s Jason Mercier has posted two video clips, less than three weeks apart, in which a) Rep. Eric Pettigrew is praising the House budget as a responsible document and b) he says that the budget will result in people dying.
-David Goldstein, at horsesass.org, reports that momentum for an income tax on high earners is faltering: “`Next year,’ income tax advocates are being told. `Maybe next year.’ Yeah. Right.”
Goldstein argues that if ever there was a moment of opportunity for such a plan, it’s now. Not next year, when most House lawmakers will be running for re-election. Writes Goldstein:
By “next year,” of course, the powers that be mean “some other year,” which really means “never.”
-The Homeowners’ Bill of Rights has apparently died, for the third year in a row.
-With Senate Majority Leader Lisa Brown and Sen. Chris Marr standing in the House wings Friday, there was some high drama Friday night involving SB 5840, which was intended to ease some of the renewable-power rules for power companies, easing the cost to ratepayers. Environmentalists say the bill largely guts Initiative 937, which set those standards.
In a rare alliance, environmentalist House Democrats joined Republicans to pass an amendment that seems likely to kill the bill: declaring all hydropower renewable, which would largely render I-937 meaningless. From the Olympian’s Brad Shannon:
“We put a poison pill in it,” said Rep. Zack Hudgins, D-Tukwila, who voted for the amendment and then voted against the final bill.
TVW’s Niki Sullivan adds this: “It might be working: The Senate rejected the House’s amendments yesterday. It now heads to a conference committee.”
-The Seattle Times’ Jennifer Sullivan has an update on a proposal to privatize some child-welfare services. (The short form: it’s now a pilot project instead of the original sweeping reform.)
-Publicola’s Josh Feit has the blow-by-blow in the continuing tussle between education advocates over whether a bill redefining basic education. And here’s a long statement from House education chairwoman Rosemary McAuliffe, who calls the struggle over HB 2261 “one of the most difficult and bittersweet weeks in my time in our Legislature.”
-Lawmakers have agreed to defer $430 million in state pension payments.
-Lastly: lawmakers have, in fact, banned novelty lighters (those that could be mistaken for a toy or that have flashing lights) out of concern that they attract children who end up starting fires with them.
I’m sitting in the House hearing on a proposed .3 percent sales tax hike, HB 2377.
The proposal, from Rep. Eric Pettigrew, would raise just over $1 billion in three years. Much of that money would be steered into health care: mental health services, hospitals, nursing homes, public health programs and the state’s Basic Health Plan, which provides coverage for thousands of low-income folks. To offset the hit to low-income families, it would also send millions of dollars in state tax rebates back to people who qualify for the federal Earned Income Tax Credit.
The plan would only take effect if voters approve it in November.
The crowded hearing room is full of health care providers, officials and lobbyists representing nurses, hospitals, adult day health programs, public health, etc. They all support the plan as a critical lifeline.
A hospital official said that if the bill passes, hospitals will still see a state budget cut of $110 million over the next two years. Without it, that will be $350 million.
Dianse Sosne, with SEIU 1199 NW, said that proposed budget cuts would tear the state’s health safety net apart. That means mothers, babies, and elderly people ending up in emergency rooms, she said, and more mental health patients ending up in jails, prisons, under bridges and on the streets.
“And ultimately those costs will fall on taxpayers,” she said.
Among the few voices opposing the plan: anti-tax initiative promoter Tim Eyman.
Eyman blasted the proposal, saying that legislative budget writers are protecting non-essential state programs while asking voters to approve a billion-dollar tax hike to stave off cuts to people needing health care.
“Have you no shame?” he said.
“You are fooling no one,” he told lawmakers. “…The best thing you can do for the poor and the middle class is to stop taxing them to death.”
Pettigrew and many of the advocates will hold a press conference about the proposal later this morning.