H-1885              _______________________________________________

                                 SUBSTITUTE HOUSE JOINT MEMORIAL NO. 4016

                        _______________________________________________

State of Washington                               51st Legislature                              1989 Regular Session

By House Committee on Revenue (originally sponsored by Representatives Wang, Holland, H. Sommers, Silver, Grant, Rust, May, Spanel, Anderson and Winsley)

Read first time 2/27/89.

TO THE HONORABLE GEORGE BUSH, PRESIDENT OF THE UNITED STATES, AND TO THE PRESIDENT OF THE SENATE AND THE SPEAKER OF THE HOUSE OF REPRESENTATIVES, AND TO THE SENATE AND HOUSE OF REPRESENTATIVES OF THE UNITED STATES, IN CONGRESS ASSEMBLED, AND TO CONGRESSMAN BROOKS:

          We, your Memorialists, the Senate and House of Representatives of the State of Washington, in legislative session assembled, respectfully represent and petition as follows:

          WHEREAS, The state of Washington has the power and authority to tax and collect sales tax; and

          WHEREAS, The United States Supreme Court, in @beNational Bellas Hess@ee vs. @beThe Illinois Department of Revenue@ee created a tax loophole for out-of-state businesses doing direct marketing, mail order, and other like business in this state; and

          WHEREAS, This loophole deprives the state of Washington millions of dollars of revenue that is legally owed to the state but for the lack of "physical presence" by these businesses within the state of Washington; and

          WHEREAS, Sales tax is a major revenue source for the state of Washington and the revenue lost by the state of Washington from the inability to collect sales tax from these out-of-state businesses is in excess of seventy million dollars per year; and

          WHEREAS, Businesses in the state of Washington are daily losing customers and income due to the unfair competition granted these out-of-state firms by this unjust loophole; and

          WHEREAS, Federal legislation, HR 3521, has been introduced that would substitute an "economic presence" test for the "physical presence" test, authorizing states to require the collection of sales tax by out-of-state firms whose business is large-scale and who engage in "regular and systematic" solicitation of sales within a state; and

          WHEREAS, The state of Washington supports and needs this legislation;

          NOW, THEREFORE, Your Memorialists respectfully pray that the United States Congress pass HR 3521 or similar federal legislation, to authorize the collection of needed revenue by states and allow all businesses, both within and outside of a state to compete freely and fairly.

          BE IT RESOLVED, That copies of this Memorial be immediately transmitted to the Honorable George Bush, President of the United States, the President of the United States Senate, the Speaker of the House of Representatives, Congressman Brooks, and each member of Congress from the State of Washington.