Washington State Introduces Postage Tax Bill

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Legislation that would allow mail fulfillment service providers to continue pass-through reimbursements of postage expenses in Washington state without sales taxation was introduced last week.


Democratic Rep. Patrick Sullivan sponsored House Bill 1785. In general, the bill would stop the practice of taxing bulk mail postage reimbursements because of legislation that passed in Washington in 2002. The 2002 legislation stems from an optional provision within the Streamlined Sales and Use Tax Agreement that requires mailing services providers to charge customers sales tax on the combined total of fees and postage.


Currently, this postage is considered a pass-through cost in Washington, but that would change July 1 if legislation is not enacted. The exemption gives states the option of not taxing postage by requiring mailing firms to list on a separate invoice, or line-item, the cost of the postage and track it as a pass-through. In many states, such as Washington, legislation must be passed to allow this exemption.


During the past three years, mailing services firms have met with legislators, explaining how Washington could lose hundreds of jobs if mailing services firms must tax postage. Bills were introduced in the state House and Senate to recognize the pass-through as law, but they died in session in 2003 and 2004.


Mailers received a reprieve this year when an outpouring of industry and legal response prompted the state Department of Revenue to push back implementation of the new taxation provision from January to July 1.


Melissa Campanelli covers postal news, CRM and database marketing for DM News and DMNews.com. To keep up with the latest developments in these areas, subscribe to our daily and weekly e-mail newsletters by visiting www.dmnews.com/newsletters


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