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Bailey introduces bill to
take taxes off postage costs
Small businesses finding
themselves taxed on their postal costs could have some relief delivered
to them under a bill introduced today in the House of Representatives by
Rep. Barbara Bailey.
House Bill 1572 would
exempt certain postage costs from taxation. The bill, said Bailey, comes
from a suggestion made by a constituent who operates a mailing service
in Oak Harbor.
"Many small mailing
services operate throughout the state doing packaging and mailing as the
main part of their business. Although federal law prevents the state
from charging sales taxes on postage that was purchased through the
United States Postal Service, the Department of Revenue discovered that
it could charge a business and occupation tax against the postage used
by these services," said Bailey.
"This was a shock to these small businesses that normally operate on a
shoe-string budget. Many have been very concerned because they have no
way to recoup this loss," added Bailey, R-Oak Harbor. "Even more
disconcerting is the fact that the department was seriously considering
making those collections retroactive, going back years and years to
collect back taxes which could potentially cost these businesses many
thousands of dollars – and likely force many to close their doors."
Bailey said the Department
of Revenue eventually agreed to a waiver until the Legislature could
address the issue of whether or not this tax could be collected.
Under HB 1572, a tax exemption would be made on the amounts derived from
charges made for postal costs, if the postage was purchased from the
U.S. Postal Service and made on behalf of a buyer to deliver printed
materials without charge to the recipients.
"It eliminates the
requirement of these businesses to pay tax on postage that is simply a
‘pass-through,’" said Bailey. "State government has made it extremely
difficult for small businesses to make a living in Washington.
Unfortunately, there will be more closures if we continue to put the
burden of our state’s services wholly on the backs of our small
businesses. We need to do all we can to encourage the growth of small
businesses in our state, which in turn provide jobs for our communities
and income for families. The bill I’ve introduced is an effort to
provide these businesses needed relief from this very difficult tax and
keep them operating."
The measure has been
referred to the House Finance Committee for further consideration.
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For more information, contact:
John
Handy, Assistant Director: (360) 786-5758
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