A bill making technical changes to a law passed last year that expanded the state’s retail sales and use tax may also subject a number of currently excluded activities – including the naming rights of facilities like many of those at WSU – to the existing tax.
Enacted last July, Senate Bill 5814 expanded the number of services to which the state’s retail services and use apply, including several advertising services such as search engine marketing and the acquisition of advertising in the internet media. The law explicitly carved out certain activities as not taxable, including billboards, transit advertising, dynamic or static signage at live events, and naming rights.
The bill brought forward this session, House Bill 2257, makes small, technical corrections but includes a section on page 74 of the bill that would subject the previously carved out activities to the tax, should the state lose in a lawsuit brought against it regarding the underlying law.
“We’re greatly concerned about the potential removal of the exemption provided for advertising, naming rights and the like,” Connor Haggerty, WSU’s assistant director of State Relations, told the House Finance Committee recently. “We are routinely encouraged by the Legislature to find ways to leverage state dollars, and when we do, we often name buildings or parts of them after companies or families who’ve been generous. Please don’t penalize us for this success.”
You can view WSU’s testimony on the bill below, starting at one hour, 58 seconds and 41 minutes.