Comment: State's new digital ad tax complicated, sloppy and iffy - Everett Herald

This analysis by Amber Gunn examines Washington state's controversial new digital advertising tax and its potential economic consequences for local businesses.

Washington recently implemented a tax package generating over $9 billion, with $1 billion coming from extending retail sales tax to digital advertising and tech services. The law creates an uneven playing field by taxing online advertising while exempting traditional media like radio, TV, and newspapers. This discriminatory approach has sparked legal challenges, with Comcast suing the state for violating federal Internet Tax Freedom Act provisions that prohibit discrimination against electronic commerce.

• The tax applies complex compliance requirements that burden small businesses while potentially driving work to competitors in other states
• Legal uncertainty surrounds the policy, as similar laws in other states face constitutional challenges in ongoing court battles
• The rushed implementation created confusing definitions and carve-outs, requiring eight interim guidance statements from revenue officials
• Businesses may relocate operations to avoid the competitive disadvantage, potentially benefiting neighboring Idaho's economy instead