Provides extensive definitions and clarifications for “digital code,” “digital automated service,” “digital goods,” and “electronically transferred.” With regard to imposing sales and use taxes on digital products, gives extensive clarification on what constitutes “retail sale,” especially as it pertains to custom software and pre-written computer software. Offers new sections on sales tax exemptions regarding digital codes, electronic subscriptions such as newspaper and magazines sold over the internet, among others.   Official Text and Analysis.

To add an intent section and incorporate the streamlined sales and use tax agreement's definitions for digital books, movies, and music. The following additional digital automated services or products are excluded from sales and use tax: online educational programs by private accredited schools, online travel agent services, and online auctions and other marketplace creation services. Amnesty language is included. The apportionment language is clarified. The substitute bill makes additional technical corrections.

To extend amnesty to sales and use taxes assessed by the Department prior to January 1, 2009. Provides a sales and use tax exemption for programming on a pay-per-program basis if the sale of the programming is subject to a franchise fee. Makes a technical change regarding the location of a definition.

To remove the emergency clause.

To eliminate the imposition of sales and use tax on digital automated services. (Only standard information such as movies, books, and music are subject to tax.) Eliminates sales and use tax on streamed digital products. (Only downloaded digital products would be subject to tax.)eliminates apportionment and nexus provisions.

Conforms the sales and use taxation of downloaded digital goods to the streamlined sales and use tax agreement. Imposes sales and use taxes on certain streamed or remotely accessed digital services, goods, and pre-written computer software. Provides certain exemptions for electronically transferred digital goods and digital services. Applies the traditional retailing and wholesaling business and occupation tax rates to electronically transferred digital goods and digital services. Prohibits the state from extending its taxing authority to a business by considering a business's use of Washington based servers to store digital goods. Makes a number of technical amendments.