Sen. Steve O’Ban, a Republican from west Pierce County, wants to give Washington businesses a break by raising the income threshold tied to the business and occupations (B&O) tax. Calling it one of the most onerous impediments to economic progress in the state, O’Ban pointed to the broad bipartisan support for his Senate Bill 6318 – a measure considered today by the Senate Trade and Economic Development Committee.
The B&O tax is imposed on the gross receipts of businesses in Washington. Businesses are not required to file returns if the value of products, gross proceeds of sales or gross business income is less than $28,000 per year. However, O’Ban points out, most small and startup businesses easily hit that figure in their gross receipts during the first year of operation, and are subjected to the crippling B&O penalty even though they finish the year with a net loss.
“Raising the B&O tax credit threshold would allow businesses to generate more revenue without having to pay that tax until they reach a point where they are more productive and showing a profit,” said O’Ban, who represents the 28th Legislative District. “It’s no coincidence that we’re the only state in the country with a B&O tax and our rate of business failures rank among the highest in the nation. That’s why the state needs to raise the threshold to fifty thousand per year.”
“We have to compete with Oregon and Idaho – which have no B&O tax – and this bill will make our state more competitive,” O’Ban added. “My bill will make a difference in the real world by encouraging people who start small businesses to stay in business in Washington.”
SB 6318 – which is co-sponsored by 35 other lawmakers, both Republican and Democrat – is expected to be approved by the economic development committee soon.