Software Taxes


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If you didn’t already know, I live in Seattle. There’s a bill that’s currently in the Washington State Legislature that, if passed, will levy a tax on all software customizations done by businesses (at least, for now, those businesses residing in the state of Washington).

You may not think this impacts you directly, but if other states (or governments in other countries) see it as a viable option, they may consider doing the same thing where you live.

Check out the legislature’s proposed HB 3191. Page 90, Part XV, Point 2, as put forth by Representatives Hunter, Conway, and Hasegawa:

In order to preserve funding for higher education, it is the legislature’s intent to use revenue generated from assessing a sales and use tax on custom software to support the state’s institutions of higher education and financial aid programs including the state need grant.

What the hell does THAT mean? Well, if you’re a business in the state of Washington, you’ll be subject to a state sales tax (currently 6.5%) on any “custom software” or customization thereof.

As √úbermind points out, there are two likely scenarios:

  • Scenario 1. If [a Washington company] hires an in-state consultant or consulting company, the in-state consultant or consulting company will have to collect the sales tax and pay it to the state.
  • Scenario 2. If [a Washington company] hires an out-of-state consultant, they will have to pay use tax (paid in lieu of sales tax) on their next tax bill. Again, ANY company in Washington will suddenly have to pay at least 6.5% more for these services.

I spoke with Ken Myer, President and CEO of the WTIA, to find out more about this bill – and why it’s probably not the smartest thing for small businesses here. The Washington Technology Industry Association has been fighting hard against this change.

According to Ken, approximately 2,000 Washington companies that do custom work on software will be directly impacted by this bill if it is passed. Yes, that would include the giants such as Microsoft. However, it’s also going to hit the small startup down the street… and hit it hard.

In order for small businesses to set themselves up to charge sales tax for their services and goods, they will have to raise their prices by 8% or more, just to continue breaking even. Therefore, the tax isn’t only impacting the business owners… it also just impacted YOU, the potential consumer.

As Ken says, this is the first time that a professional service is being turned into a product (and being taxed as such). As we discussed this point, a regular user in my live chat room couldn’t help but ask how a government could possibly tax something that isn’t technically “tangible,” which is a good point. A physical disc is tangible, yes. However, the services provided by businesses who are doing custom code work are not truly something tangible. Where do we draw the line here?

Pardon me, but I thought marijuana was outlawed? How else could Representatives Hunter, Conway, and Hasegawa come up with such an asinine idea? More politics behind the bill are outlined by Todd over at TechFlash.

Why sock it to small business owners who are struggling enough in a challenging economy?

It’s getting to the point where owning a small business in the state of Washington is no longer viable. There are very few incentives for me to stay here (as an operating business entity). I love the weather, I love the people, but these f*ckwits in the House have got to go.

There’s not a state in the Union that’s truly friendly to small business owners anymore.

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When Will Your Bus Arrive?


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During our open mic session at Gnomedex last August, Bill Corrigan came on stage to talk about OneBusAway. This website was built by some students at the University of Washington who were tired of always missing their bus. You can search for bus stops near your location, and it will give you not only where they are… but also tell you how much time until the next one departs! Never miss your bus again!

Right now, this website only works for King County, in the great state of Washington! But who knows? Perhaps it will branch out one day to include your city!

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Toledo Vader


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I bet you never knew that Darth Vader had an evil brother named Toledo, did you? And I also bet you didn’t know that Toledo Vader is so infamous that he has a road named after him. It’s quite true, I assure you. Toledo Vader Road is found right here in Washington, and leads to a town named after him!

I love to travel, and I love to drive. What I really love is to find silly things along the way that helps make the trip less monotonous. I have been known to play every variation of the license plate game you could possibly think of. I look for animals in the clouds as they float across the sky. I make up new lyrics to old songs I’ve heard a million times – and the new words often don’t make any sense at all.

Travel companions have often remarked that I’m fun to ride with. I make the most out of every trip I take, whether it’s just a zip into the supermarket or halfway across the country. I don’t bother trying to work, other than to leave myself voice notes on the iPhone whenever a post idea pops into my head. Instead, I choose to relax and let myself just drift along and have fun. I don’t get to do that very often, so it’s a nice change of pace.

When was the last time you really paid attention to your surroundings as you drove? Sure, you watch what other drivers are doing, read the road signs and obey the traffic signals. But do you take the time to truly absorb what’s around you? How beautiful are those birds flocked alongside the road? Can you see the sun beginning to set in the distance? Are you taking the views around you for granted? Stop it and pay attention!

What fun games and silly things do you do to help pass the time in a car or plane? What are some crazy road or town names that you’ve come across in your travels?

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Seeing Seattle

We're enjoying the views of Bellevue here in Seattle; I hope to start exploring the local cities a little more in the new year. Ponz sent me links to Seattle's Science Fiction Museum and Hall of Fame and the Seattle Space Needle. Too cool! Yes, Seattle has definitely been a bit rainy – but today was a welcome exception to that rule. To celebrate, I took a few photos from our deck. Yes, that's really Mt. Rainier. And yes, that's really Bellevue below the moon. A few folks have asked for wallpapers of these Seattle images, so… okay.
If you can't travel to Seattle, try: a Seattle symphonya Seattle skya Seattle sighta Seattle sonnet. So, they're actually not Seattle – but the photos were taken while I was standing in Seattle!