Governor Inslee signs historic bill to require sales tax collection by remote sellers

Mar 20, 2019
Written by Mark Johnson, Senior Vice President of Policy and Government Affairs

Gov. Jay Inslee last week signed SB 5581. It adopts a U.S. Supreme Court decision that allows states to require sales tax collection and remittance by remote sellers.

State Senator Christine Rolfes (D) was the prime sponsor of the bill that adopts the high court’s Wayfair vs. South Dakota case. WR President/CEO Renée Sunde and I joined the Governor and staff of the Revenue Department at the bill-signing ceremony.

This decision has been in the works since 1992 when the U.S. Supreme Court handed down the Quill vs North Dakota decision. It said that states were not allowed to require the collection and remittance of sales tax from remote sellers that did not have a fiscal presence or “nexus”  in the taxing state.  This single decision set up an unbalanced, unfair playing field where brick-and-mortar retailers were at an unfair disadvantage to remote sellers who did not have to collect sales tax.

As internet and remote sales increased, brick-and-mortar sales suffered.  Sales tax states were losing hundreds of millions of dollars each year.  With the successful Wayfair decision, sales tax states can now require all sellers regardless of their location to collect and remit sales tax that already is due.  This will mean hundreds of millions in lost tax revenues to Washington State and more importantly, a fair competitive playing field for all retailers.

Washington Retail and its national partners joined together to press the case before the U.S. Supreme Court.  The South Dakota retailers deserve special mention for being the lead association in filing the case.  This is a huge win for Washington State and the country as a whole.