Taxes stay local for florists

OLYMPIA — The House of Representatives unanimously passed legislation Wednesday that continues the long-standing policy of origin-based sales tax for florists.

The Florist Telegraphic Delivery (FTD) association is a network that provides a way for florists to serve each others' out-of-town customers by exchanging orders. The florist making delivery to the customer on behalf of the florist taking the order is considered to be making a wholesale sale, and that location is entitled to the sales tax generated.

Senate Bill 6799, sponsored by Sen. Debbie Regala, D-Tacoma, allows florists to continue using origin-based sourcing in determining what local jurisdiction is entitled to the sales tax generated from a particular transaction.

Currently, local sales and use taxes are sourced on the origin-based system. However, last year the Legislature enacted SSB 5089 which fully conformed Washington law with the streamlined sales and use tax agreement (SSUTA). This law takes effect July 1, 2008, and changes the determination of sales tax entitlement from origin-based sourcing to destination-based sourcing. This means that sales tax is determined by where the product is shipped to, and not by the business’ local tax structure. For florists, this would be a huge problem.

“A florist who testified on behalf of this bill told of the extra time and expense to determine and calculate the varying tax rates in multiple jurisdictions,” said Regala. “This bill enables florists to continue utilizing the origin-based sales tax policy agreement that they developed over 70 years ago.”

The SSUTA was recently amended to extend an exclusion of sales by florists from the destination-based sourcing provisions through December 31, 2009. Under SB 6799, this exclusion remains.

SB 6799 now moves to Governor Gregoire’s desk for her signature. The Governor has 10 days to sign the bill into law. The 2008 Session is scheduled to adjourn March 13.

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