Sen. Steve O’Ban’s legislation to support small businesses will receive a public hearing Wednesday morning. Under Senate Bill 5043, small businesses with less than $50,000 in annual income would not pay excise tax; today the exemption is only for those making less than $24,000 per year. It will go before the Senate Committee on Trade and Economic Development at 8 a.m. Wednesday.
“This is a modest stop to help small businesses struggling to get on their feet. We need to support them because they are the drivers of our state’s economic recovery,” said O’Ban, R-Pierce County. “Navigating our state’s archaic business-tax system is burdensome and hits small businesses hard. Raising the filing threshold is one way of mitigating that burden and will give our small businesses a better chance to thrive.”
State government collects 22 percent of its revenue from the business-and-occupation tax, which is based tax on gross sales regardless of whether a business makes a profit or loses money. Small businesses can be particularly affected as the system is confusing and replete with exemptions and different tax rates for different types of business activities.