On July 1, 2008, the destination sales tax went into effect. The destination sales tax was set up so, if a retailer (seller) sold something (purchaser), and the item(s) was to be delivered to the purchaser in a different city or county, the retailer would charge the sales tax applicable to the delivered city/county and then pay that sales tax to that city/county. If the purchaser was to take the item(s) with them (not have it delivered by a third party), then the sales tax would be determined by the tax applicable to the location of the seller and the sales tax would be paid to the seller’s city/county.
This distribution of the sales tax to the destination city/county was long overdue, but it fell short of what should have been in the law. Since each transaction has a buyer and a seller, both of whom bring benefits to the transaction, why is 100% of the sales tax being paid to the destination city/county, when the selling city/county is an equal party to the transaction, but the selling city/county receives none of the applicable sales tax. Right now the destination city/county gets 100% of the sales tax and the selling city/county gets 0%. Is it not more equitable for both the purchasing city/county and the selling city/county to split the sales tax equally, 50/50.
Splitting the sales tax 50/50, as to the purchaser and the seller locations, can easily be accomplished today with computers that are doing the work anyway. We all have 9 digit zip codes for our street, city/county address. (It is on our driver’s license.) I suggest the Washington State Senate and/or House, make this modification to the sales tax distribution without any delay, so that all of the parties, the purchasing city/county and the selling city/county, to the transaction get an equal and equitable share of the sales tax. The sales tax charged should be based upon the seller’s location, to keep it simple.
Mike Lantz
Retired tax attorney
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