Newsletter — September 11, 2025

Crystal Leatherman promoted to Director of Policy and Government Affairs

The Washington Retail Association (WR) is pleased to announce the promotion of Crystal Leatherman to Director of Policy and Government Affairs, effective September 2025.

Since joining the association in 2023, Crystal has played a key role in shaping the association’s advocacy strategy and expanding its presence at both the state and local levels. Her leadership has strengthened bipartisan relationships, built new industry coalitions, and positioned WR as a leading voice on critical issues such as extended producer responsibility, organized retail crime, artificial intelligence, and emerging technologies.

Crystal has led numerous initiatives to increase member engagement and improve communications, including the association’s grassroots strategy and launching updated legislative resources for association member companies. Her proactive, collaborative, can-do approach has helped expand WR’s advocacy network, engaging public/private stakeholders from across the state of Washington.

In her new role, Crystal will oversee WR’s Policy and Government Affairs Division, guide legislative strategy, and continue to build strong relationships with policymakers, industry leaders, and local communities. Her promotion reflects WR’s ongoing commitment to strong, effective advocacy on behalf of Washington’s retail industry.

IN THIS ISSUE

POLICY

ECONOMY

ON THE LOCAL FRONT

RETAIL THEFT & PUBLIC SAFETY

IN THE NEWS

TRENDS

Washington businesses prepare for new retail sales taxes

Beginning October 1, 2025, Washington businesses will begin collecting new retail sales taxes under Engrossed Substitute SB 5814, passed during the 2025 legislative session. The law expands the definition of retail sales to include a range of professional services such as advertising, live presentations, information technology services, custom website development, and others.

The Washington Department of Revenue (DOR) is preparing to issue interim guidance to help businesses understand how to comply with the new requirements. According to DOR, these guidance statements will be published in September and cover areas including advertising services, custom software, and temporary staffing. Businesses are encouraged to review this information carefully to ensure proper collection and reporting.

State leaders have said the changes are intended to keep up with rising costs and to maintain government services. Some lawmakers and business groups, however, have expressed concerns about how the expanded taxes could affect consumers and business operations.

The Department of Revenue is continuing to provide updates and resources as the October 1 effective date approaches. For more details and the latest information, visit the Washington Department of Revenue.

Washington State to tax advertising services starting October 1, 2025

Starting October 1, 2025, Washington businesses providing advertising services must collect retail sales tax and report income under the Retailing B&O tax classification. This change comes from ESSB 5814, Chapter 422, Laws of 2025, modernizing how services are taxed.

Advertising services include both digital and nondigital activities related to creating, preparing, producing, or disseminating ads. Examples include graphic design, layout, production supervision, placement, web campaign planning, online referrals, search engine marketing, and traffic monitoring.

Some services are excluded, such as web hosting, domain registration, newspaper publishing, radio and TV broadcasting, and out-of-home advertising like billboards, transit ads, and in-store signage. Advertising sold to members of an affiliated group is also exempt.

Businesses must report income from advertising services on their excise tax returns under Retailing B&O, retail sales, and local sales tax classifications. The tax rate depends on where the customer receives the service. New tax classifications can be added via My DOR at dor.wa.gov/Login.

For guidance, visit dor.wa.gov/NewRetailServices or call 360-705-6705.

Interim guidance issued for retail sales tax implementation

The Department of Revenue has released new interim guidance to assist with the implementation of Engrossed Substitute Senate Bill (ESSB) 5814, which makes changes to retail sales tax beginning October 1, 2025. These Interim Guidance Statements (IGSs) clarify how the upcoming changes will apply and can be relied upon until permanent guidance is issued.

The latest IGS addresses how businesses should manage tax collection and reporting for contracts established before the October 1, 2025, effective date. This resource aims to provide clarity for businesses with existing agreements to ensure compliance during the transition.

Additional IGS updates will be shared in the months ahead to support businesses in understanding and preparing for these tax changes.

For the latest published and upcoming guidance, as well as additional resources and opportunities to submit questions, visit the Department of Revenue’s website.

Washington Supreme Court clarifies salary posting requirement

The Washington Supreme Court recently issued a decision interpreting the state’s Equal Pay and Opportunities Act (EPOA), which requires employers with 15 or more employees to include salary ranges and wage scales in job postings. The Court ruled that individuals do not need to prove they are applying in “good faith” to bring a claim if a posting does not comply with the law. Applicants may pursue statutory damages between $100 and $5,000 per violation, along with attorneys’ fees and costs. (RCW 49.58.110).

The ruling means that anyone submitting an application in response to a job posting without the required wage information may be entitled to damages, regardless of their intent to seek employment.

Earlier this year, lawmakers amended the EPOA to provide businesses with a limited correction period. From July 27, 2025 through July 27, 2027, employers notified of a missing salary range in a posting have five business days to correct the issue. If addressed within that timeframe, penalties and damages cannot be awarded.

This decision reinforces the importance of reviewing all job postings to ensure they meet EPOA requirements.

Retailers on alert: WA Supreme Court expands email marketing liability

A recent ruling by the Washington Supreme Court has significantly heightened the legal risks for retailers who rely on email marketing to reach Washington consumers. In the closely watched case, Brown v. Old Navy (2025), the Court held that any false or misleading information in the subject line of a commercial email, even if minor, violates the Commercial Electronic Mail Act (CEMA). Each violation carries a $500 statutory penalty per email recipient, regardless of whether the consumer suffered any actual harm.

This means that commonly used marketing tactics, such as subject lines promising “Today Only” deals that later get extended, could expose businesses to massive liability. For example, if a retailer sends one violative email per week to 100,000 recipients over the course of a year, the total exposure could exceed $2.6 billion in penalties.

The ruling imposes what amounts to strict liability: retailers can be penalized even if the subject line wasn’t intentionally deceptive, and even if consumers weren’t actually misled. The court emphasized that simply receiving the email is enough to support a claim under CEMA.

Since the decision, at least eight lawsuits have been filed in state and federal courts, targeting both large national brands and smaller local retailers. Legal experts warn this is just the beginning of what may become a wave of class action litigation focused on email marketing practices.

What Retailers Should Do Now

In light of this decision, retailers are urged to take immediate steps to protect themselves:

Carefully review all email subject lines to ensure they are factually accurate and not misleading.
Avoid time-sensitive language (e.g., “Today Only” or “Last Chance”) unless the statement is strictly true.
Train marketing teams on compliance to reduce the risk of violations.
Join Washington Retail’s advocacy efforts to push for sensible reforms to CEMA that protect consumers without enabling abusive litigation.

With enforcement ramping up and penalties escalating, it's time for retailers to RE-view, RE-train, and RE-act.

Upcoming webinar on Toxic-Free Cosmetics Act compliance

Retailers and distributors in Washington are invited to join a free webinar hosted by the Washington State Department of Ecology on Wednesday, October 1 at 9:00 a.m. PT. The session will provide guidance on complying with the Toxic-Free Cosmetics Act (TFCA), which applies to all beauty and personal care products manufactured, distributed, or sold in the state.

The webinar will review the restrictions that took effect January 1, 2025, including the one-year product sell-through period ending December 31, 2025. Additional topics include restrictions on formaldehyde releasers, interim rules on lead impurities, and opportunities for retailers to help shape future regulations. Ecology staff will also discuss compliance and enforcement processes, strategies for supporting supply chain compliance, and resources available to businesses.

Participants will have the chance to ask questions and receive technical assistance directly from Ecology staff. Presentation materials will be posted on the interested parties webpage following the event.

Teen unemployment rates climb in high wage states

National unemployment has remained relatively low over the past year, yet recent data shows teen joblessness is rising. According to the Bureau of Labor Statistics, unemployment among 16 to 19-year-olds reached 15.2 percent in July, up from 11.8 percent in January. This marks the highest rate since the early months of the pandemic.

Economic shifts are part of the story, but state wage requirements also appear to play a role. States with higher minimum wages often show above average teen unemployment rates. For example, California reported a 21.2 percent average teen unemployment rate last year, compared to the national average of 12.7 percent. Washington recorded 14.8 percent and Illinois 14.2 percent, both above the national average and both with higher minimum wages than many states.

Not all states follow the same trend. Kentucky, with a minimum wage of $7.25, posted the nation’s second highest teen unemployment rate at 17.4 percent, but more of its teens are participating in the labor force compared to other states.

The data highlights the complex balance between wage policies, economic conditions, and opportunities for young workers entering the job market.

Report projects economic impacts from federal tariffs

A new analysis from the Washington State Office of Financial Management (OFM) projects that recently announced federal tariffs could cost Washington’s economy $2.2 billion and more than 30,000 jobs over the next four years if fully implemented.

The report highlights the potential ripple effects for a state that is among the most trade-dependent in the nation, with $58 billion in exports and $62 billion in imports recorded last year. Sectors including aerospace, agriculture, food processing, and retail could be particularly affected. Higher costs are projected across a range of goods such as food, automobiles, clothing, and shoes. For example, OFM estimates food prices could rise 16% over the next several years and used car prices by as much as 25%.

Business and community leaders voiced concern about how these changes could influence household budgets and local operations. Nonprofits also noted increased demand for services, as families are already feeling the impact of rising costs.

While tariffs are a central factor in OFM’s forecast, other economic pressures such as recent state tax increases, household expenses, and global market fluctuations are also shaping the outlook. The state’s next official revenue forecast is expected later this month.

Image: King County Councilmember Claudia Balducci speaks at a press conference Thursday, Aug. 21 in Kent about starting up a new retail crime task force as former King County Sheriff Sue Rahr, center, and Kent Mayor Dana Ralph look on. STEVE HUNTER, Kent Reporter

King County candidate proposes funding for retail theft prosecutions

King County Councilmember and County Executive candidate Claudia Balducci has announced a proposal to direct a portion of the recently approved 0.1 cent countywide sales tax increase toward addressing retail crime. The plan would dedicate about $600,000 annually to fund two detectives in the King County Sheriff’s Office and one prosecuting attorney.

Balducci outlined the measure alongside former Sheriff Sue Rahr and Kent Mayor Dana Ralph, who noted that organized retail theft has affected both large retailers and small businesses. The funding would help restore a prosecuting attorney position that was previously eliminated when grant support expired.

Supporters of the proposal emphasized the impact retail theft has on grocery and neighborhood stores, pointing to recent closures in the region. Balducci described the measure as a way to improve safety for customers, workers, and local communities.

Her opponent in the County Executive race, Councilmember Girmay Zahilay, also acknowledged retail theft as a serious concern but cautioned against earmarking specific sales tax revenues before broader consultation with law enforcement, prosecutors, retailers, and community members.

The King County Council is expected to review how best to allocate the new public safety sales tax revenue in the months ahead.

Olympia’s Proposition 1: Outsized workplace mandates beyond Seattle

This November, Olympia voters will decide the fate of Proposition 1 (Prop 1), a sweeping workplace mandate that goes far beyond Seattle’s labor standards. Originally filed in both Tacoma and Olympia, only Olympia’s version remains after a judge denied unions’ lawsuit to force the measure on Tacoma’s November ballot. As of Sep 9, the judge held that a special election in Feb 2026 for the initiative.

Supporters insist Prop 1 follows Seattle’s example. The truth is, it expands much further and carries unintended consequences for families, seniors, and small businesses. For example:

Predictive scheduling rules would apply to every industry, not just retail and hospitality.
Premium pay requirements would force employers to pay extra for schedule changes within two weeks and time-and-a-half for shifts less than 10 hours apart.

These mandates mean less flexibility for workers. Students who balance classes with split shifts on the same day or parents who adjust schedules for family needs could lose those opportunities entirely. Employers simply cannot absorb the penalties. Seniors who rely on in-home caregivers for multiple short shifts a day could see skyrocketing costs as “premium pay” becomes the norm.

Local small businesses, nonprofits, healthcare providers, and housing advocates are alarmed. They warn that Prop 1 threatens higher costs, fewer jobs, and disruptions across the community. In response, community leaders have come together to form Olympia Together, a coalition urging a “No” vote. Their message is simple: the more voters understand Prop 1’s far-reaching consequences, the more they see it as the wrong policy at the wrong time.

Strengthening supply chains: CORCA explained

By: Nate Kaplan, State Director

GORAIL

America’s supply chain delivers nearly 59 tons of freight for each American every year, much of it moving in intermodal containers from ship to train to truck and carrying everything from electronics to food. But shipments have become a growing target of organized retail theft, with Class I railroads reporting a 40% jump in thefts from 2023 to 2024 and more than 65,000 incidents last year.

These are no longer crimes of opportunity. Theft rings are highly organized, using sophisticated tactics and often tied to transnational networks. Cargo theft losses are huge—with an estimated half a billion dollars stolen in 2024 alone—while arrests remain rare and repeat offenses are common.

The Combating Organized Retail Crime Act (CORCA), introduced with bipartisan support, aims to strengthen the federal response by improving cross-agency coordination, expanding data sharing, and giving law enforcement stronger legal tools. With backing from railroads, retailers, and ports, the legislation underscores the need to secure the entire supply chain.

For freight railroads, which move 40% of the nation’s intercity freight, CORCA is a critical step to reduce theft, protect network integrity, and ensure the efficient movement of goods that Americans depend on every day.

Help secure our supply chain by sharing your CORCA support with policymakers via email at GoRail’s Action Center here.

Kroger to close six Western Washington stores this Fall, citing rising theft

Kroger, the parent company of Fred Meyer and QFC, has announced the closure of two additional Fred Meyer locations in Lake City and Redmond this October. These closures follow earlier announcements regarding stores in Kent, Everett, Tacoma, and Mill Creek, bringing the total number of affected locations in Western Washington to six.

The Lake City store at 13000 Lake City Way NE will close on October 17, while the Redmond store at 17667 NE 76th St will close on October 18. A total of 343 employees are impacted, though Kroger has stated that all affected staff will be offered opportunities at other stores.

According to Kroger, the decision was influenced by rising theft and what the company described as a challenging regulatory environment. The closures are part of a broader national plan to close 60 stores over the next 18 months.

Local lawmakers have been pressing Kroger to reconsider its decision, particularly in Lake City, where residents have limited access to full-service grocery options. Seattle-area legislators, including state Rep. Darya Farivar and City Councilmember Debora Juarez, met with Kroger officials last week to explore alternatives such as maintaining only the grocery section of the store. While Kroger has agreed to continue discussions, it has offered no assurances and has also signaled interest in redeveloping or selling the Lake City property, assessed at $25 million.

Despite the closures, Kroger reported $45.1 billion in Q1 2025 sales, with notable growth in e-commerce. More details can be found in the company’s Q1 2025 earnings report.

The misperception of shrink and its impact on organized retail crime

It’s time to set the record straight — claims that ORC losses are inflated due to inventory shrink are inaccurate

David Johnston

Vice President, Asset Protection & Retail Operations

NRF.com

August 19, 2025

As communities and retailers grapple with escalating theft and violence, some continue to falsely suggest that organized retail crime losses are overstated due to a retailer’s reported inventory shrink.

Shrink, or shrinkage, measures inventory loss by comparing a retailer’s book inventory to the physical inventory on hand. Calculated as a percentage to sales, shrink is a metric used by a retailer to understand their current state of inventory loss. However, those who understand shrink know it is not a direct or sole indicator of theft.

Retail shrink is too broad to be directly correlated with theft

Shrink calculation encompasses diverse types of losses, not just theft. While it does include external theft (like shoplifting), employee theft and vendor fraud, shrink also accounts for non-theft-related losses such as administrative errors, damages, expired goods or spoilage.

Usually calculated at the store level, shrink helps retailers identify high-loss locations to further investigate how losses occurred. Also calculated at a corporate level, that number helps gauge loss as part of their profit and loss statements. A shrink percentage, either at an individual store or at the corporate level, does not identify the amount of specific category of loss, including theft.

Shrink calculation methods vary significantly between retailers

Various retailers employ different approaches to determine shrinkage, depending on their accounting practices, merchandise mix, and how losses are reported in their profit and loss statements. Some calculate at cost, others at retail. Some include non-theft items like damages or promotional adjustments, while others do not. Inventory counts can occur annually, quarterly or more frequently, leading to different posting times for shrink.

These differences in calculation highlight the unique and complex inventory environments of modern retail. NRF recognized that reporting an average annual inventory shrink percentage was no longer an accurate benchmark for retailers and ceased publishing an industry figure in 2023.

WR’s Director of Policy & Government Affairs Joins WAORCA at WSORCA Conference

WR's Director of Policy & Government Affairs, Crystal Leatherman, recently attended the Western States Organized Retail Crime Alliance (WSORCA) Conference alongside the Washington Organized Retail Crime Alliance (WAORCA).

The WSORCA Conference brings together retailers, loss prevention specialists, law enforcement, and industry partners to share best practices, discuss emerging trends, and strengthen collaboration in the fight against organized retail crime.

WAORCA Vice President Carl Kleinknecht delivered a critical presentation on proactive awareness, emphasizing the importance of staying ahead of evolving threats through vigilance, communication, and collaboration.

Conference sessions highlighted the importance of public-private partnerships, innovative prevention strategies, and the critical role of information sharing in protecting both businesses and communities.

Participating with WAORCA at this annual event provided valuable opportunities to exchange ideas with experts across sectors and to bring back insights that will help guide WR’s ongoing work on public safety and retail crime prevention legislation in Washington.

Washington Retail Association CEO search continues

The Washington Retail Association (WR) is seeking its next President & CEO, following the planned retirement of Renée Sunde in December 2025. The national search has been underway for several weeks, and qualified candidates are encouraged to apply.

This is a unique opportunity to lead one of the West Coast’s most respected trade associations during a time of transformation in the retail industry. The next President & CEO will guide statewide initiatives, strengthen WR’s role as a trusted voice for retailers of all sizes, and help shape the future of the industry in Washington.

WR is seeking a dynamic and strategic leader with proven executive experience and a vision for advancing retail.

How to Apply

Submit a resume and cover letter through the WR candidate portal: washingtonretail.org/ceosearch.

Governor Ferguson proclaims September 2025 Careers in Retail Month

Governor Bob Ferguson has proclaimed September 2025 as Careers in Retail Month, recognizing the vital role the retail sector plays in Washington’s economy and communities.

Retail is the state’s second-largest private sector employer, with nearly 400,000 Washingtonians working in the industry. Small businesses form the backbone of the sector, with 93% of retailers employing fewer than 50 people. Despite the growth of online shopping, 87% of all retail sales still take place in physical stores across Washington, underscoring their importance to local communities.

The industry also serves as a cornerstone of state revenue, collecting 41% of Washington’s total sales tax. In 2024, retailers generated $226 billion in gross taxable income, making the sector the state’s leading tax revenue contributor. Retailers are also advancing sustainability by reducing plastic waste, lowering emissions, and expanding use of renewable materials.

Beyond economics, retailers support charitable initiatives, community programs, and public safety efforts. The industry recently championed bipartisan legislation creating a $100 million public safety grant program.

Washington Retail thanks Governor Ferguson for recognizing the importance of retail careers and the workers who keep Washington’s economy thriving.

Left to right: Renée Sunde, WR President & CEO, and Representative Cindy Ryu (D-32).

PNWER 2025 Annual Summit summary: Strengthening tourism and border collaboration

Last month, the 2025 Annual Summit brought together over 600 leaders from government and industry across the Pacific Northwest for five days of discussion, collaboration, and relationship building. Renée Sunde, WR’s President & CEO, served on the Host Committee for this year’s event.

A key focus of the summit was enhancing cross-border travel and tourism between U.S. states and Canadian provinces, particularly with over a million visitors expected in Seattle and Vancouver for the 2026 FIFA World Cup. Sessions highlighted strategies to improve traveler experiences while maintaining security, including modernizing border operations, leveraging digital tools such as preclearance and biometrics, and investing in infrastructure and staffing.

Panelists emphasized tourism’s role as an economic driver that supports small businesses and workforce development. Lessons from past international events, including the 2010 Olympic Games in BC, informed discussions on long-term planning and collaboration. Leaders also underscored the importance of coordinated efforts among federal and state agencies, Indigenous nations, tourism organizations, and the private sector to ensure smooth and safe travel.

Watch the Border and Tourism session and Watch the Travel with Purpose session to learn more.

Department stores show signs of resilience

Department stores are adapting to changing consumer habits and showing renewed momentum. Macy’s and Kohl’s have both seen notable stock gains recently, reflecting progress in their strategic efforts. Macy’s has focused on luxury offerings and remodeling stores, with strong performance from its Bloomingdale’s and Bluemercury brands. Kohl’s has expanded its discount eligibility and improved its sales outlook, with growth in women’s apparel, jewelry, and back-to-school merchandise.

Both retailers have also been optimizing their store footprints. Macy’s has closed underperforming locations while concentrating on top-performing stores, supporting its turnaround plan. Kohl’s announced plans to close several stores by April, aligning with efforts to strengthen overall operations. Analysts note that these changes, along with improved customer satisfaction, are helping drive traffic and sales.

Despite these gains, department stores continue to face challenges from a wide range of shopping alternatives and a projected slowdown in holiday spending. Nevertheless, the recent performance of Macy’s and Kohl’s demonstrates that traditional department stores can adapt and remain relevant in today’s retail landscape.

Washington ranks among top 10 “Most Fun” States

Washington has been named one of the top 10 “most fun” states in the country, according to a new study from WalletHub. The personal finance site analyzed 26 indicators ranging from the cost of going to the movies to the number of restaurants, national parks, amusement parks, and music festivals per capita.

Washington placed seventh overall, earning high marks for both nightlife and recreation. The Evergreen State ranked fourth in nightlife, thanks in part to its variety of theaters, casinos, and festivals, as well as competitive average prices for wine, beer, and movie tickets. Washington also placed sixth in entertainment and recreation, with particularly strong scores for movie theaters per capita and personal spending on recreation services.

Seattle, Tacoma, Spokane, and Vancouver were also featured in WalletHub’s earlier rankings of the “most fun cities in America,” with Seattle leading the way at No. 19 out of more than 180 cities.

California, Florida, and Nevada claimed the top three spots nationally, while Oregon rounded out the top 10 just behind Washington.

WR diversity statement

WR is committed to the principles of justice, equity, diversity, and inclusion. We strive to create a safe, welcoming environment in which these principles can thrive.

We value all people regardless of race, ethnicity, gender, religion, age, identity, sexual orientation, nationality, or disability, and that is the foundation of our commitment to those we serve.

Washington Retail Staff

Renée Sunde, President/CEO — 360.200.6450 — Email

Crystal Leatherman, Dir of Local & State Government Affairs — 360.200-6453 — ‬Email

Rose Gundersen, VP of Retail Services — 360.200.6452 — Email