If you have run a successful crowdfunding campaign, you know what happens next. You owe a lot of sales tax. And you might not have appreciated what you were getting yourself into on the sales tax front.
Crowdfunding Sales Tax Troubles
There is a bill that has been introduced in the Washington State legislature that will attempt to alleviate or fix this problem.
The bill is HB 2655. You can track it here.
There will be hearing on this bill on January 29, at 8:00 a.m., in Olympia.
If you care about this issue, you can drive down to Olympia and sign up to testify in favor of the bill.
Please participate in this issue if you can. I like what the preamble to the bill says:
The legislature finds that crowdfunding plays an increasingly vital role in the economy and in individual communities, and that the global crowdfunding market will surpass ninety billion dollars in the next ten years. The legislature further finds that the current business and sales tax structure of Washington state is an impediment to entrepreneurs, inventors, artists, and private citizens seeking financial contributions to start new businesses, develop new products, complete creative projects, and achieve various goals. The legislature further finds that the current tax structure treats crowdfunding campaigns differently depending on their structure. It is the intent of the legislature to provide a business tax exemption for crowdfunding donations and to improve the sales tax structure as it applies to crowdfunding in order to simplify the tax code, improve fairness, and promote economic growth.