Inside Washington Retail : Our Latest News

Newsletter April 15, 2021

IN THIS ISSUE

Tax and fee hikes weigh down state transportation spending proposal
Legislature considers doubling boat tax
Legislature approaches final 10 days of 2021 session
COVID rollbacks start tomorrow in three Washington counties
Business and labor support long-term care opt-out extension
Attend a webinar to gain new COVID safety digital tool accessible anytime, anywhere
Amazon workers in Alabama reject forming a union
Social media’s role grows in retail
You only get one back, use it wisely

Tax and fee hikes weigh down state transportation spending proposal

State legislators are entertaining armfuls of tax and fee increases before they adjourn the 2021 Session later this month. There are so many new potential bills that minority Republicans have coined a social media “Taxapalooza” hashtag to update followers on a massive, 16-year transportation bill overseen by Senator Steve Hobbs, a Democrat who chairs the Senate’s Transportation Committee.

None of this should escape the attention of retailers or their customers. If approved, it would boost the cost of doing business for retailers and the cost of living for most of their customers for years to come. Hobbs is quoted as saying it’s only fair to spread the 33 proposed tax and fee increases in the proposal to as many Washingtonians as possible.

The entire list of potential new costs is here.

The state gasoline tax, among the nation’s highest that was hiked 11.9 cents over two years in 2015, would climb up to 9.8 cents more under the proposal. All retailers may pay higher delivery costs for manufacturer shipments and to ship items to customers. Needless to say, perhaps, is that the cost of driving to and from the stores to shop also could go up and eat into purchasing power and the economy.

Here’s just a sampling of all the other ways lawmakers are weighing to pay for other transportation improvements:

A new $150 tax per $100,000 value of new residential construction. It could be $300 per $100,000 value of commercial construction.
As of January 1, 2022, a 50-cent fee per trip on food deliveries, taxis and ride-sharing services.
A 1% sales tax increase for buying auto parts
Boosting standard driver’s license fees (six-year card) from $54 to $60.
A 1% boost in the 5.9% car-rental tax.
A doubling of the fee to change your driver’s license photo from $10 to $20.
A $15 commercial drone registration fee.
Increasing the 50-cent car tab surcharge to fund new ferries to 75 cents.

A quarter or dollar more here and there across the state adds up to billions of dollars for transportation projects, many of which will eventually be necessary. Washington can’t afford to maintain a crumbling transportation system.

However, taxpayers have been through a punishing financial year during the lingering coronavirus pandemic. Record numbers lost their jobs and some businesses are struggling to get back on their feet. The lengthy list of new expenses outlined here could be on top of a controversial and legally questionable capital gains tax the Legislature is poised to approve on the sale of personal assets including family businesses.

Before signing off this Session, lawmakers should weigh the costs of their ideas on the bent backs of many employers and taxpayers across our state. It is really the right time to ask for more?

Legislature considers doubling boat tax

Mark Johnson, Senior Vice president of Policy and Government Affairs

Senate Bill 5483 would double the current watercraft excise tax on September 1, 2021. The bill sponsored by Senator Steve Hobbs was heard Monday in the Senate Transportation Committee. I testified in opposition to this provision.

Boaters are currently the only users of the state’s waterways, roadways, and air space that pay a percentage-based excise tax to the state. Owners of cars do not pay this tax to the state anymore, and neither do owners of motor homes, planes, or helicopters. Doubling a tax on the only user group already paying an excise tax to the state is unfair and inappropriate.

Washington is home to a robust and thriving marine trade industry. Thousands of citizens are employed in the building, maintenance, sale and chartering of watercraft. With our abundant waterways – Puget Sound, the San Juans, and countless lakes and rivers – Washington is one of the country’s most active boating states.

Doubling the tax on boaters will have a chilling effect on this important industry. It will also drive the dream of boat ownership out of the range of many hard-working Washington families. WR implores the Transportation Committee and entire legislature to reject doubling the watercraft tax.

Legislature approaches final 10 days of 2021 session

With less than two weeks left in the 2021 Legislative Session, lawmakers are busy working to agree on bills they can send to Governor Inslee for further action.

Adoption of a two-year state budget is the main agenda item but Washington Retail has continued to track bills of specific importance to retailers. The Governor has five days, excluding Sundays, to take action on any bill passed by the Legislature, provided adjournment does not occur within those five days. Adjournment of the remote session is scheduled for April 25.

Please note that Legislature action can be spontaneous and challenging to anticipate. Updates reported here were accurate at the time of writing.

WR has tracked:

Senate bill 5062, Washington Privacy Act. The Senate approved the bill that would establish handling the security of online consumer information between retailers and sales processors. A House version under further consideration includes an additional way the law could be enforced. WR will update the bill’s status if it should change.
Senate bill 5096, capital gains tax. WR opposes the bill that so far has been approved in the Senate. This bill is immune from cutoff until the April 25 adjournment. If approved and signed into law, a court challenge is expected on the grounds that the tax on income from the sale of personal assets including businesses is unconstitutional in Washington State.
House bill 1091, low carbon fuel standard. The Senate and House have narrowly passed the bill. Governor Inslee is expected to sign the bill that directs the Department of Ecology to reduce greenhouse gas emissions. WR opposes the bill because it would increase fuel prices for retailers and their customers without demonstrated effectiveness from other West Coast states that have approved similar regulations.
Senate bill 5191, price gouging. Both houses of the Legislature have approved the bill to limit retail price increases during an emergency such as the COVID-19 pandemic. Washington Retail has expressed concerns and has worked to improve terms in the language.
House bill 1076, allowing third-party lawsuits. After passing the House, the Senate failed to move the bill for further consideration. It would have allowed third parties to sue companies for alleged violations of employment laws. WR opposed the bill.
Senate bill 5355, liens on property. The bill on the Governor’s desk for signature would allow wage liens to be placed on the property of businesses accused of non-payment of certain wages. WR opposed the bill.

In addition to weekly newsletter updates on the status of key bills, Washington Retail will produce a much more comprehensive report to members about the outcome of all retail-related bills tracked during the 2021 Session.

COVID rollbacks start tomorrow in three Washington counties

Retailers in Pierce, Cowlitz and Whitman counties will roll back tomorrow to stricter Phase 2 recovery protocols announced earlier this week by Governor Jay Inslee.

While most retailers are operating at 50% capacity with Phase 3 status in the state’s pandemic recovery program, stores in the three affected counties will have to roll back to 25% capacity as earlier in the health crisis.

Before Inslee announced the rollback, Washington Retail joined nearly 70 business organizations in sending a letter to Inslee urging him to first continue the state’s vaccination campaign for three more weeks before considering whether to make changes. The business coalition believes continuing the distribution of vaccines will more effectively reverse rising COVID-19 caseloads than targeted tightening of safety protocols.

The rollback restricts stores, restaurants, gyms and entertainment venues alike by reducing operating capacity, and therefore, opportunities to generate sales. The state is currently deciding which phase retailers are in on a county-by-county basis.

All Washingtonians age 16 and over become eligible for the vaccine this week. The state has so far fully vaccinated about 1 in 5 of the state’s 7 million residents.

Meanwhile, Inslee has yet to announce whether his three-phase recovery program includes mores phases. As a result, retailers are uncertain what additional safety steps they may need to take to return to pre-pandemic operations.

Business and labor support long-term care opt-out extension

Rose Gundersen, VP of Operations and Retail Services

Agreements among business, public employee and labor groups are rare, but it happened in a letter sent to the House requesting concurrence with the Senate’s amendments for HB 1033! In fact, over forty private, public and labor organizations joined in the letter.

Amendments passed in the Senate under HB 1033 have two key components to the state’s new long-term care payroll deduction mandate scheduled to start 1/1/2022.

Extends workers opt-out deadline to November 1, 2021 instead of the July 28, 2021 in the bill.
Requires the newly established Washington State Long-Term Services and Supports Trust (LTSST) to work with insurers to develop supplemental long-term care insurance products because the state program only offers a $36,500 life-time benefit with no portability.

When the Legislature established the LTSST under 2SHB 1087 in 2019, opt-out was available permanently, but the Legislature continued to close the opt out window as reported in a prior article in our newsletter.

According to the January 2021 LTSST Recommendations Report, continuous adjustments need to be made to keep the program solvent despite multiple investments in actuarial research by a national actuarial firm since 2015 and forward. Perhaps, the program passed in 2019 lacked the broad stakeholders at the table to ensure buy-in like the process and agreement reached in establishing the Paid Family and Medical Leave program.

The coalition of organizations is pleased to see the House concurring with the Senate amendments yesterday. Now we can look forward to improving buy-ins and stakeholdering that would actually strengthen the long-term care program.

Attend a webinar to gain new COVID safety digital tool accessible anytime, anywhere

Employer ALERT – Now that the state is beginning to open up with higher occupancy, L&I’s safety inspection is not letting up. To avoid rolling back or fines, the answer is to stay vigilant with employee training through an L&I approved training platform.

Join one of our April webinars to acquire a free tool to train new employees and keep your current employees vigilant about COVID safety best practices. Upon completion of training, employees receive a certificate as a written proof that demonstrates employers’ effort to support safety.

Target attendees – employers, safety coordinators, new employees or those who could use a refresher course.

4/15 – 12:00 Noon 45 minutes in Español presented by Marcos Wanless, President and Founder, Seattle Latino Metropolitan Chamber of Commerce

4/28 – 10:00 A.M. 45 minutes in English presented by Rick Means, Retail Services Director of Safety and Education

4/29 – 6:00 P.M. 45 minutes in Español presented by Marcos Wanless, President and Founder, Seattle Latino Metropolitan Chamber of Commerce

Select a date above to register soon!

Amazon workers in Alabama reject forming a union

By a 2 to 1 margin, Alabama employees of Seattle-based Amazon have voted to reject a proposal to be represented by a labor union. Results were announced last week.

The organizing effort by the Retail Warehouse and Department Store Union drew national attention to Amazon, which operates as a non-union company.

The National Retail Federation issued a statement after the election results were announced. It read, in part: “Union representation is a choice for workers, but many clearly prefer opportunities in a competitive marketplace that provides strong wages and benefits over the anonymity of a collective bargaining agreement.”

A union victory could have encouraged other organizing drives throughout Amazon facilities. The outcome means that Amazon remains free to add or reduce payrolls at its warehouses as it wants, not according to union procedures.