Tax your apps more? King County executive’s proposal would allow cities to tax mobile downloads

SEATTLE, Wash. — That 99 cent app — or any paid smartphone app — may soon cost just a tad more.

King County Executive Dow Constantine detailed a number of ideas to change the tax system in the county Monday during a keynote address to the Sound Cities Association. Among them was allowing jurisdictions to tax mobile app downloads.

Washington is one of 26 states that applies retail sales tax to downloaded items — from movies and music, to apps. According to the state’s Department of Revenue, an app is either computer software or a digital automated service, and both are subject to sales tax.

“The state currently levies retail sales tax on sales of mobile apps,” said Anna Gill, the communications manager for the Washington State Department of Revenue.

The proposal is based off the idea that cities and counties aren’t getting the tax revenue they used to since brick-and-mortar software stores are disappearing.

“You used to go to Egghead Software to buy your copy of Word Perfect,” Constantine said. “And you paid sales tax on it. That, in large part, doesn’t happen anymore.”

Constantine’s proposal is just that – a proposal. There has been no move towards King County taxing apps or any other of his ideas, such as taxing capital gains or restructuring the sales tax. And the King County executive acknowledges that taxing mobile downloads may not be popular in the land of tech entrepreneurs.

“I’m guessing that wouldn’t be wildly popular in our tech community,” Constantine said in a release.

The executive was not immediately available to talk with Q13 News following Monday’s address.