Bills: SSB1152 , SSB1154 , SSB1131 , SSB1155 , SF504

Committee: Joint Ways and Means

Keywords: sports wagering, income tax, gambling winnings, tax withholding, Iowa tax law, revenue, sales tax, electronic filing, tax returns, Department of Revenue, financial reporting, grain dealers, warehouse operators, indemnity fund, bankruptcy claims, fees, market regulation, claims reimbursement, cigarette regulation, tobacco taxation

Bills: SSB1173 , SSB1165 , SSB1189

Committee: Joint Workforce

Keywords: unemployment insurance, unemployment tax, employer contributions, Iowa Code chapter 96, taxable wages, experience rating, benefit ratio, reserve fund ratio, contribution rate table, unemployment compensation fund, seasonal unemployment, construction employers, landscaping employers, payroll tax, state unemployment tax, SUTA, reciprocity, comity, employer tax relief, wage base reduction

Transcript Highlights:

• generally must comply and stay within the boundaries of what is agreed to as a member state of the SUTA
• So I already mentioned the SUTA as a tax policy and tax administration constraint.
• For our purposes here, we talked about the SUTA, Commerce Clause, and ITFA.

Committee: House Finance

Summary: The Finance Committee work session began with a presentation from Dr. Reich on the Economic and Revenue Forecast Council (ERFC), explaining how the state’s revenue forecasts are built from economic models and how they are used to support the budget process. He described the main revenue sources for state operating funds, the ERFC’s membership and quarterly public process, and the factors affecting the latest forecast, including slow employment growth, weak taxable sales, higher inflation pressures, tariffs, federal spending uncertainty, and the federal shutdown. He said the September forecast was reduced, mainly because of lower sales tax and real estate excise tax collections, with smaller changes to capital gains and other funds, though revenues were still roughly on track and the base case remained slow growth rather than recession. Committee members asked about whether Washington’s economy can lag national downturns, and Dr. Reich said the timing and severity of impacts can differ by recession and sector. Representative Chase asked what happens if revenues fall short of expenses, and Dr. Reich said that is a budgeting question for elected officials rather than the forecast council. Members also noted the importance of the forecast for policy decisions, especially given slowing employment and manufacturing. The committee then heard from the Department of Revenue on implementation of Senate Bill 5814, which expands retail sales tax to certain services effective October 1, 2025. Steve Ewing explained the existing sales and use tax framework, sourcing rules, reseller permits, and the multiple points of use exemption, then walked through the new taxable categories, including live presentations, temporary staffing, investigations and security services, IT services, custom website development, advertising services, and custom software changes. He described DOR’s implementation efforts, including listening sessions, a public landing page, notices to taxpayers, and interim guidance, and noted a six-month grace period for certain pre-existing contracts but no general penalty or interest relief. Committee members raised concerns about taxpayer confusion, the burden on new taxpayers, sourcing and allocation issues, and the difficulty of determining liability in cases like speakers, nonprofits, and advertising services. DOR said it would continue outreach, answer ruling requests, and likely seek technical cleanup legislation in the 2026 session. The committee took no formal votes and adjourned after the presentations and questions.

Transcript Highlights:

• generally must comply and stay within the boundaries of what is agreed to as a member state of the SUTA
• So I already mentioned the SUTA as a tax policy and tax administration constraint.
• For our purposes here, we talked about the SUTA, Commerce Clause, and ITFA.

Summary: The committee first received a presentation from Dr. Reich on the Economic and Revenue Forecast Council (ERFC), including how the council’s joint executive-legislative forecasting process works, the main state revenue sources, and recent economic conditions. He said Washington’s economy is slowing, with weak employment growth, softer taxable sales, and uncertainty from tariffs, federal spending, and the federal shutdown. He also noted that the September forecast was reduced, mainly because of lower sales tax and real estate excise tax collections, and that the state still expects modest growth rather than a recession. Members asked about whether Washington tends to lag national downturns and how forecast information should affect budgeting; Dr. Reich said the forecast is a revenue tool, not a budgeting decision, and that spending choices remain with elected officials. The Department of Revenue then presented on Washington’s sales and use tax structure and the implementation of Senate Bill 5814, which expands retail sales tax to several services effective October 1, 2025. Steve Ewing explained how sales and use tax are sourced, how reseller permits and the multiple points of use exemption work, and how the new law applies to live presentations, temporary staffing, investigations and security services, IT services, custom website development, advertising services, and custom software. He said DOR held listening sessions, issued interim guidance, and set up a centralized landing page and outreach efforts to help taxpayers understand the changes. He also described a six-month grace period for certain pre-existing contracts through March 31, 2026, but said penalties and interest still apply under the statute. Committee members raised concerns about how businesses and individuals will know when a service is taxable, who is responsible for collecting and remitting tax, and how sourcing will work for services delivered across multiple locations or online. DOR staff walked through examples involving accounting services, live lectures, virtual events, advertising campaigns, and search engine marketing, including the use of reasonable allocation and pool codes when exact sourcing data is unavailable. Members also questioned the administrative burden on small businesses and professionals newly subject to tax, and whether additional legislative fixes or relief from penalties and interest may be needed. No votes or formal actions were taken in the work session.

Transcript Highlights:

• It's SUTA, which funds the unemployment benefits going into the Unemployment Trust Fund, and FUTA is

Committee: House Government Efficiency

Summary: The Committee on Government Efficiency met in executive session and voted several bills due pass. House Bill 3136 passed 13-1, House Bill 2506 passed 14-0, and House Bill 1758 passed 14-0 after brief comments, including one member stating he would vote present because the issue divided the public. The committee then took up House Bill 2278, which was combined with House Bill 2403 in a House Committee Substitute. Members discussed and adopted a committee substitute and amendment creating an appeals board for MSHSAA-related eligibility disputes, with supporters saying it would provide a final, independent appeal option for students and parents and opponents raising concerns about process, timing, and gubernatorial appointments. The substitute for House Bill 2278 and 2403 was adopted and voted do pass 11-7, with several members voting no over concerns about independence and government oversight of a nonprofit. The committee then held a public hearing on House Bill 2877, which would create a new unemployment administration adjustment fund funded by a small portion of employer unemployment contributions, capped at $10 million annually, to reduce reliance on general revenue for administering unemployment insurance. Representative Voss said the bill would not raise employer costs or affect benefits, and Division of Employment Security Director Alan Andrews testified in support, saying the measure would help avoid general revenue exposure and keep the program self-sustaining. Members asked about the effect in a recession, the relationship to federal funds, and whether the proposal could become a precedent for other funds; no opposition testimony was offered. The committee also heard House Bill 3428, a cleanup bill to move expired dormant funds back to general revenue. The sponsor said several funds had expired and were no longer in use, though some accounts had already been renewed or were still active and would be removed by amendment. Members questioned whether the affected agencies had been contacted and whether some of the money should instead be renewed or used for the original purposes; the sponsor said she was open to discussion, but the bill as presented was intended to reclaim expired balances. No one testified in opposition, and the hearing concluded without a vote on the bill in the transcript.

Transcript Highlights:

• It's SUTA, which funds the unemployment benefits going into the unemployment trust fund, and FUTA is

Committee: House Government Efficiency

Transcript Highlights:

• Apparently with, I don't know if it's FUTA, SUTA, how all that works with unemployment.

Committee: House Budget