As a filmmaker and small business owner in Spokane for nearly 25 years, I’ve had the privilege of creating and sharing inspiring stories from around the world and close to home — stories of resilience, innovation and community. But the story unfolding here at home is one of frustration, inequity and short-sighted policymaking.
Washington’s new digital advertising tax is being sold as a “modernization” of the tax code. In reality, it’s an unfair and damaging burden on small businesses like mine.
Under this law, digital services, including online advertising, video production, web development and digital marketing are now subject to sales tax — up to 10.6% in some parts of the state. Meanwhile, traditional forms of advertising, such as TV spots, billboards, and newspaper ads, are explicitly exempt. Washington is taxing the tools of the future while exempting the tools of the past, even though search, streaming, social media and targeted digital ads are the most cost-effective ways for small businesses to reach customers.
At Corner Booth Media, we employ a team of creatives, videographers, editors, producers, audio engineers, and digital advertising and social media managers. We all live and work in Spokane. We help small businesses promote themselves, we work with nonprofits to amplify their missions and we support public campaigns about health, education, and much more across the state. Every dollar counts. Every client matters. This tax means we’ll have to raise prices for our clients, many of whom are fellow small businesses.
Some argue that large tech companies should pay their fair share, but here’s the irony: Even as Microsoft and Amazon cut jobs in Washington, lawmakers have crafted a tax that hardly changes the giants’ bottom line while piling new costs onto “Little Tech.” In a state that prides itself on being a global tech leader, the policy instead hurts small digital shops, nonprofits and even school districts —punishing Main Street far more than Wall Street.
We may even have to consider relocating to Idaho. A 10% cost difference could decide whether a contract is signed, and that’s enough to push businesses like mine across the border. A tax meant to raise revenue ends up chasing it away, and with it, good-paying jobs.
Washington isn’t the first state to try this experiment. Others have taxed digital services, only to face lawsuits, disappointing revenues and backlash from businesses. The difference is that those states don’t claim to be global tech leaders. Washington does. And when Washington — home to some of the world’s most innovative companies and the small firms that fuel them — chooses to repeat those mistakes, the consequences are far greater.
Digital advertising and marketing are the equalizers that enable a Spokane coffee shop to reach new customers or a nonprofit to raise money online without buying a TV spot at double the cost. They are the lifeline for online marketing firms like mine, which in turn support the small businesses and organizations that keep Washington’s economy strong. When those tools are taxed, it isn’t Big Tech that pays; it’s the local shops, schools and community campaigns that depend on them.
That’s the real cost of this law: not just higher bills, but a state that risks trading its reputation as a leader in innovation for the role of follower.
Frank Swoboda, Founder and Creative Director of Corner Booth Media, Spokane, WA