When you became a meeting prof, did you ever imagine that navigating state tax laws would be on your checklist?
Such laws vary widely, but the taxation of event production services and live events themselves have become significantly more complex lately due to states expanding their “retail sale” definitions. While most states only tax tangible goods, a growing number now tax the specific services required to produce an event.
The most recent example: Washington. Last October, a new law passed by the state legislature classified event planning and production services as well as most “live presentations”—including in-person workshops, seminars and interactive online programs—as taxable retail sales.
But wait! On March 30, Governor Bob Ferguson signed another bill enacting an income tax on millionaires, a first in the nation. As one of just eight states that had no individual income tax previously, this was big news. Yet not getting equal media attention was the change the new law made to the state’s new sales and use tax rules.
Saved by the Millionaire’s Tax?
The so-called millionaire’s tax also exempted from sales tax “live presentations, including, but not limited to, lectures, seminars, workshops or courses where participants attend either in person or via the internet or telecommunications equipment that allows audience members and the presenter or instructor to give, receive and discuss information with each other in real time,” according to published reports. These reports indicate that professional services related to live events are also exempted.
Not so fast, though. These exemptions do not kick in until January 2029. Except for those that are effective on July 1 of this year, including those mounted by nonprofit organizations, and musical, dramatic, comedic or similar performances.
So, overall, still a sigh of relief? Not so fast again. The new millionaire’s tax will be challenged. Should a court find it to be unconstitutional and invalidate it, its sales tax exemptions will be null and void, too.
In short, it’s confusing and it’s probably not over.
Smart Meetings says: Reach out to Visit Seattle or other DMO in Washington. It can point planners to official state resources and update you on the latest developments in this unfolding saga.
