Small businesses cheer House plan to change B&O taxes

By Eric Tegethoff
Washington News Service

OLYMPIA — As budget negotiations continue in Olympia, small business owners are supporting House Democrats’ plan to restructure the business and occupation tax.

The House has proposed raising rates 20 percent for businesses making more than $250,000 in gross revenue and exempting any business smaller than that.

Munish Bharti recently started a small law practice representing clients who are the victims of negligence. He says the B&O tax as it stands now puts stress on small businesses like his as they’re starting up.

“What often happens is, smaller businesses, it takes a while to get going and we shouldn’t have taxes that essentially inhibit a business’ ability to grow from the get-go without giving it an opportunity to grow,” he states.

State Republicans, who control the Senate, have proposed in their budget changes to property taxes that would result in higher taxes for residents of cities such as Seattle and lower taxes for rural areas.

Lawmakers are in their second special session and must come to a budget agreement by July 1 in order to avoid a government shutdown.

The House’s B&O restructuring proposal would eliminate the tax for more than 70 percent of businesses. It also would give businesses that gross between $250,000 and $500,000 a $100,000 deduction.

Bharti maintains this plan balances the scales tax-wise for companies of all sizes.

“At the end of the day, everything should be fair, and I think this proposal will help make tax burdens more fair for both small and large businesses alike,” he states.

The change to the B&O tax is part of the House’s plan to make large corporations share more of the state’s tax burden.

House Democrats also have proposed a new capital gains tax. However, Gov. Jay Inslee has said neither this nor the Senate’s property tax proposal has enough support to pass both chambers.


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