I really don't understand this argument that keeps getting made.
DSP probably legally has to pay:
Washington says anyone whose occupation or business activities occur in Washington has to pay the tax, unless the occupation or business activities fall in a category that is exempt. DSP isn't doing anything that's clearly exempt; it'd be a legal question hashed out at various appeal and court levels. Countless people would benefit from a determination that this type of business doesn't have to pay the tax, but no one has tried to make that determination happen and gotten any news written about it. I don't think it's happened. I don't think it will in the end, because if it does legislators will immediately plug the hole because...
DSP probably should have to pay:
DSP's occupation/business activities include buying services from providers that pay taxes to Washington, buying products from retailers that pay taxes to Washington, and using real estate that is in Washington whose owner pays property taxes to Washington. He has a significant connection to the state.
DSP probably can afford to pay:
DSP complains about barely scraping by one month then the next month he
- buys a brand new car
- loses a part time job of income and doesn't seem to notice the missing money
- cuts out cell phone, cable, and landline bills and doesn't seem to notice the new money
- spends thousands of dollars flying a woman out for visits and ultimately a move-in
- pays more to an attorney than the money the state is asking him to pay to begin with
DSP has the money. 1.5% isn't crippling to any business. The state isn't going to worry about hampering innovation, chasing businesses away, or anything like that. It's a minimal amount of money and miles better than what at least 48 out of 58 other states in the country impose.
DSP is not cutting-edge:
Businesses like DSP's have been around for over a decade. Home businesses that offer services solely on the Internet have existed for longer than DSP has been alive. Businesses engage in all sorts of activities that have no impact on their taxation: a business can market, give freebies away, provide customer service, or any other "people aren't paying me for this particular thing, i'm only paid for this thing over here, the rest is free-will contributions" activity they want. That stuff only matters to a taxing authority if they're a charitable organization trying to meet the "non-exempt business activities" test to determine whether or not they should lose their tax-exemt status. Washington's B&O tax tries to throw people a bone by allowing them to categorize different t business activities for tax reasons, but they're not going to let people making middle class incomes beat the shit out of them with that bone and pay no taxes.
