Washington State Study Mulls Effects of a Retail Delivery Fee
The Washington State Legislature has commissioned a study on imposing a retail delivery fee on retail and online delivery purchases. Proceeds from the tax would go to cities and towns to help fund road maintenance and repair.
State gas taxes already go toward road infrastructure. But localities say that gasoline consumption has decreased. This is due to a variety of factors including the rise in hybrid and electric cards. As a consequence, the funding for repairs and maintenance has likewise shrunk.
The plan would assess a set fee on retail on online or in-store purchases that are delivered. Sellers would collect the fee and pass it on to the state. The state would then distribute the funds collected to the localities that need it.
Washington Study Looks at Other States that Have a Retail Delivery Fee
Two other states have established a similar fee. Colorado established its fee in 2022, and charges 28 cents on every delivery. The program generated $75.9 million in its first year. Businesses with less than $500,000 in annual sales are exempt from charging the fee.
Minnesota, which just started collecting the fee in July, charges 50 cents on every delivery order of $100 or more. The state expects to generate an estimated $65 million. Business with less than $1 million sales revenues in a year are exempt from the fee.
The consultants who performed the study considered a variety of different approaches. The least impactful on consumers – charging 30 cents for every order over $75 from businesses with less than $1 million in annual sales – was projected to raise $49 million in its first.
Critics say Washington’s potential retail delivery fee is a regressive tax, putting a greater burden on lower-income consumers. The bipartisan committee that commissioned the study has said it’s unclear if a bill will be submitted to the legislature in 2025.
Links
This link will take you to a copy of the Retail Delivery Fee Analysis report.
You find more information on Minnesota’s fee plan here.
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