Washington State
House of Representatives
Office of Program Research
BILL
ANALYSIS
Finance Committee
HB 1805
Brief Description: Creating a local sales and use tax to fund services for children and families that enhance well-being, promote mental health, and provide early interventions.
Sponsors: Representatives Tharinger, Ramel, Bernbaum, Ormsby, Stonier, Fosse, Callan, Mena, Doglio, Simmons, Lekanoff, Macri, Thomas, Bergquist, Leavitt, Santos, Parshley, Gregerson, Wylie, Reed, Pollet, Obras and Zahn.
Brief Summary of Bill
  • Authorizes a county to impose a local sales and use tax of 0.1 percent to be used solely for the purpose of providing additional services to assist children and their families.
Hearing Date: 2/21/25
Staff: Tracey Taylor (786-7152).
Background:

Retail Sales and Use Tax.

Retail sales taxes are imposed on retail sales of most articles of tangible personal property, digital products, and some services.  A retail sale is a sale to the final consumer or end user of the property, digital product, or service.  If retail sales taxes are not collected when the user acquires the property, digital product, or service, then use tax applies to the value of property, digital product, or service when used in this state.  The state, all counties, and all cities levy retail sales and use taxes.  The state sales and use tax rate is 6.5 percent; local sales and use tax rates vary from 0.5 percent to 4.1 percent, depending on the location.

 

Local Sales and Use Taxes.

Counties, cities, and towns were first granted the authority to impose a local sales and use tax in 1970.  There is a basic 0.5 percent sales and use tax and an optional 0.5 percent sales and use tax.  The revenues from these two sales and use taxes are unrestricted and may be used for any lawful government purpose.

 

When both the city and the county impose the basic sales and use tax, the county must credit back the full amount of the city's basic sales and use tax so that the combined rate does not exceed 0.5 percent.  However, the first 15 percent of the basic sales and use tax collected within the city must be distributed to the county.  This is also the case with the optional sales and use tax.

 

There are other optional sales and use taxes that may be imposed; however, the revenues from these sales and use taxes are restricted to specific purposes.  For example, the cultural access program sales and use tax of 0.1 percent must be used to benefit or expand access to nonprofit cultural organizations.  Many of the optional local sales and use taxes require voter approval. 
Summary of Bill:

The legislative authority of a county may by resolution or ordinance impose a local sales and use tax.  The rate of the tax is 0.1 percent of the selling price or value of the article used.  This tax is in addition to all other taxes.

 

The revenues from this tax must be used solely for the purpose of providing additional services that assist children and their families.  This can include child care; maternity support services; school-based services that address mental, social and physical health; workforce capacity building; shelter; rental assistance; and client transportation. 
Appropriation: None.
Fiscal Note: Available.
Effective Date: The bill takes effect 90 days after adjournment of the session in which the bill is passed.