With third special session likely, it’s crunch time in Olympia; concerns lodged about tax on internet sales

While we remain optimistic that there will be a state budget in place by July 1, a third special session appears to be in the offing. The Columbian reports,

It does seem likely, however, that Washington lawmakers will need a third overtime session to reach a deal on the education funding plan and the budget. Lawmakers have until midnight June 30 to sign an operating budget before facing a partial government shutdown.

“I’m confident we won’t see a shutdown and we will be done by June 30,” said [Sen. Ann] Rivers, R-La Center. “We are very near (the) conclusion of our work in the education funding group and other negotiations are ongoing.”

The countdown showdown frustrates people, understandably. The Walla Wall Union-Bulletin editorial board writes,

The Legislature needs to act, and act now.

The sense of urgency lawmakers will feel in the last few days of June needs to be felt now. The budget needs to get done right and so, too, does school funding. This is too important to be left to whomever blinks first in a game of chicken. 

Agreement on a revenue package remains elusive. The News Tribune reports that one idea, an expanded tax on internet sales, has drawn some powerful opposition.

Worldwide retailer eBay is enlisting customers to push back against a new tax on online shopping that could pass the state Legislature this year.

In a step beyond traditional lobbying efforts at the Capitol, the company sent out emails to registered users this week urging them to contact lawmakers and say the proposed online sales tax would be harmful to small businesses.

This comes as,

There are signs the tax might have enough support to pass.

The Republican-led coalition in control of the state Senate has resisted the idea less than other taxes proposed by the majority Democrat House, signaling the tax might be on the table in a final budget compromise.

Read the story for some of the details and pro/con arguments. But there’s also another wrinkle to consider, according to the Washington Research Council.
Regardless of whether there is bipartisan support for the proposal or whether it is good or bad tax policy, it is not currently constitutional. The U.S. Constitution limits the ability of states to tax out-of-state businesses. There has been a lot of legal movement on this issue in recent years, and there’s ongoing litigation in other states. (We wrote about the issue in a policy brief in March.) So it’s possible this could be a source of revenue in the future. But legislators may not want to count on it to balance the budget for the upcoming biennium.
Tick tock.