Sales tax holiday bill being considered

Feb 3, 2022
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Written by Washington Retail
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On Monday, House Bill 2018 – adopting a one-time sales tax holiday over Labor Day Weekend, was heard in the House Finance Committee. WR supports this important bill.

HB 2018, prime sponsored by Rep. Dave Paul (D-10-Oak Harbor), would give Washingtonians a break on paying sales tax for a number of items. The list of qualified products includes clothing, computers and related products, Energy Star appliances, health care equipment, over-the-counter drugs, and school supply items. There would be a cap of $1,000 per item.

This bill would help struggling consumers hit hard during the pandemic, especially those shopping for school-age children. The measure would also help retailers, many of which saw a drop in businesses as mandatory shutdowns and strict regulations to combat Covid instituted.

WR knows HB 2018 would spur more hiring in retail establishments, more advertising, stocking up on products, and magnifying non-qualified items to intensify related purchases.

Some critics say consumers would simply shift their buying timelines, and no new sales would be realized. Our independent studies and experiences from other sales tax holiday states show a different story. Sales tax, B and O tax, and employee taxes would increase during a sales tax holiday. Retailers report that a sales tax holiday rivals the excitement of shopping on Black Friday, the official start to the holiday shopping season in other states.

Even if the holiday didn’t generate a single new dollar in tax revenue, WR feels strongly that Washingtonians deserve to retain a little of their hard-earned tax dollars. The fiscal note estimates $113 million in sales tax not collected. Consider the state is expected to take in several billion in unanticipated revenues. If ever there was a time to give this a try – this is the year!

Additionally, one of the criticisms of prior sales tax holiday bills was that it would hurt local governments strapped for precious sales tax dollars. HB 2018 wisely will backfill and make whole local governments that experienced a decrease in their local sales tax collections.

WR encourages members of the legislature to pass House Bill 2018 – it is a win for consumers, a win for the state, and a win for retailers.