In today’s world where online shopping, same day delivery and free shipping is now the norm, lawmakers in Olympia are considering adding a delivery fee to every package delivered in Washington.

During a presentation to the Washington State Joint Transportation Committee, consulting company CDM Smith presented the results of a study (funded by the gas tax) which considered the impact of adding a fee ranging from $0.25 to $0.75 per delivery. The fee would be collected during the online checkout process and sent to the state. According to CDM Smith, the resulting taxes collected for a $0.30 fee would be $112 million per year.

The delivery fee is effectively a backdoor increase in the state sales tax and comes with a significant hidden cost to collect and administer by both the retailer and state Department of Revenue.

The result will be higher consumer prices, higher taxes and potentially the loss of free delivery services if prices cannot be increased to cover the additional cost.

The City of Seattle, that recently added a $5 delivery fee to food delivery services, caused a 30% drop in food delivery order volumes which immediately devastated the local restaurants who depend on food delivery services to make a profit. The City Council is currently considering a repeal of the Pay Up tax given the backlash from local business and consumers.

A delivery fee on every package delivered in the state would have a similar chilling effect.

Colorado and Minnesota have a similar delivery fee already in place. Colorado retailers are required to show the fee separately on the billing receipt. The delivery fee has caused both consumer and retailer frustration at the increased cost and one co-sponsor of the original legislation is now considering changing the law according to the Sales Tax Institute.

The delivery fee, as Colorado has already done, can be increased in the future.

Senator Marko Liias (D), Chair of the Joint Transportation Committee claimed during the presentation that the tax revenue was needed to fix the poor state of the roads in Washington. This is not accurate. The continued state subsidy of tax dollars in public transit, which has little accountability on the use of funds, would easily exceed the tax revenues collected by the retail delivery fee and should be used instead to fix Washingtons failing transportation infrastructure.

Washington State doesn’t need more transportation taxes. There are plenty of transportation taxes collected already that need to be spent on fixing the roads instead of subsidizing transit.