New bill would provide transparency for state and local taxes
How much do you pay in taxes and which level of government imposes that tax burden? A new bill would help answer that question by creating a searchable database of state and local taxes. Here is the intent section for SB 5831 - Concerning transparency in state and local taxation:
“The intent of the legislature is to make state and local tax revenue as open, transparent, and publicly accessible as is feasible. Increasing the ease of public access to state and local tax information significantly contributes to governmental accountability, public participation, and open government; this is particularly true when the information is currently available from disparate government sources, but is difficult for the public to collect and efficiently aggregate.”
There are approximately 1,800 taxing districts in the state whose officials impose various taxes on Washingtonians. There is no single resource, however, to help individuals and businesses learn which taxing districts and rates they are subject to, and how much officials in each taxing district add to their total tax burden. A typical home, for example, can be located in as many as ten different taxing districts.
SB 5831 would build on the state’s searchable budget website (fiscal.wa.gov) to help provide Washingtonians an important tax transparency resource. SB 5831 would also require an educational tax burden calculator be available. From Section 2 of the bill:
“The department must also provide tax rate calculators on the searchable database to allow taxpayers to calculate their potential taxes. Calculators must be provided at a minimum for property, sales and use, business and occupation, vehicle, and other business taxes and must be specific to the rate for the taxing district in which the taxpayer resides. The calculator may only be used for educational purposes and does not have a legal effect on taxes due.”
Increasing the ease of public access to state and local tax rates would enhance trust in government and increase the public’s understanding of the cost of government services. Improved transparency would also facilitate meaningful tax competition among taxing districts, because taxpayers could compare different tax burdens based on where they decide to live or locate their businesses.
By creating an online searchable database of all tax rates in the state for each taxing district as proposed by SB 5831, policymakers would make taxation more transparent and help citizens learn more about what government decisions mean to their pocketbooks, helping to remove the mystery surrounding taxation.