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Possible B&O Tax Deal in the Works in Oly

This Washington   March 18, 2010 at 5:32 pm Camden Swita

Word in Olympia is that Senate will consider lowering their temporary 0.3 sales tax increase if the House, which adamantly opposes the sales tax increase, matches the Senate’s longer list of B&O (business) tax increases.

Here’s the Senate’s list of service-based businesses subject to the tax increase:

Accounting
Legal
Business support services
Computer systems design
Data processing
Facilities support services
Investment advice services
Management, scientific, and technical consulting services
Administrative management and general management services
Human resources consulting services
Marketing consulting services
Process, physical distribution, and logistics consulting services
Environmental consulting services
Marketing research and public opinion poling services
Office administrative services
Parking lot management services
Promotion services for performing arts, sporting, and similar events
Public relations services
Scientific research and development services including research and development in the physical, engineering and life sciences
Other professional, scientific, and technical services

And the House’s much shorter list:

Accounting
Tax preparation
Bookkeeping
Payroll services
Advertising and related services, which includes public relations services, direct mail advertising services, and display advertising services
Agent and management services for artists, athletes, entertainers, and other public figures
Legal services
Management, scientific, and technical consulting services
Marketing research and public opinion polling services
Promoting services for the performing arts, sporting, and similar events

The Senate’s longer list would raise an estimated $170.8 million in new revenue, whereas the House’s would raise only $46.6 million—a $124 million difference.

Another selling point in the Senate plan’s favor: It would raise the B&O tax by about half as much as the House. Also, to protect small businesses, the Senate’s plan doubles the small business B&O tax credit. And the Senate’s increase would last three years. The Houses would last five years.

One big problem, though. The sales tax increase would raise $312 million, $142 million more than the B&O plan.




  • anotherneighborhoodactivist

    More fair taxes! I'll gladly pay B&O on consulting etc., and a truly progressive income tax (higher taxes the higher the income), if it's combined with a reduction in the sales tax. Set the rates to make up the budget gap. Just do it.

  • ooga

    Yes, just raise my taxes more! Hell, why don't you just take my entire paycheck. I paid over $70,000 last year in taxes. Not enough, I'm sure. You people are all nuts.

  • NoSpin

    The B&O tax is loopy – it taxes gross revenue instead of profits, so even a business that is losing money has to pay.

    But as long as it's in place, it should apply to ALL businesses.

  • Booga

    Waaambulance alert! Wah! I pay so much taxes!!!! Wah! I just pulled a number out of my ass to show how much I pay!!! Wah! I made the number big enough to impress the ladies so maybe I'll get another trophy wife without having to spend all that money on fancy drinks for her at Canlis, and maybe this one won't leave me for a real man!!! Wah! Feel sorry for me while simultaneously envying my income!!!!

  • TeamMaJo

    Hey Ooga… something tells me that if I heard your income level and saw the home that you lived in, I wouldn't really feel very sorry for you. I'm sure life is pretty tough when you make so much money that you have to pay $70,000 in taxes each year.

    There's 4 person households in this state that don't make that much in year (before taxes). Greed = Poverty… Your way of thinking is why there is homelessness and hunger is this world.

  • http://www.politickling.com/ poliTICKLING

    I'm not opposed to taxing goods and services uniformly. But let's be clear about the B&O tax. It is just as regressive for businesses as the sales tax is for individuals.

    As NoSpin points out, the tax is a gross receipts tax, not a tax on profits. A small family owned business that brings in $100,000 worth of revenue in a year but has $120,000 worth of expenses, still has a B&O tax bill to pay. So the struggling daycare, electrician, or maid has to pay taxes that either add to their losses or equate to a much higher percentage of their profits while the profitable companies (like Boeing, Nordstrom, and Amazon) pay taxes that are a small fraction of their profits.

    Business ownership plays a large role in economic and social empowerment. Our state has a business tax system that allows big corporations to get bigger and richer (and that is BEFORE adding extra perks like special Boeing tax break packages and the data center tax break that was just passed) while small businesses fight to survive and grow.

    Many people have stopped asking whether the sales tax should be increased and have started asking if the sales tax is the most appropriate tax structure for our state. I hope more people also shift from trying to find where we can get more B&O tax revenue, to asking whether a more progressive, profit-based business tax is more appropriate for our state.

  • ooga

    My way of thinking creates jobs. Your way of thinking creates dependency.

    Here's the breakdown . . . .

    My business had $235,000 in revenue last year.
    $45K to one employee salary
    $70K in operational/supplies/expenses
    $70K in TAXES of all sorts
    $40k MY salary
    =$10 left over of “profit” for my business — of which will all be rolled over back into the business.

    So, as you can see, I'm living way high on the hog.

    I love the haters on these blogs who automatically think I'm some capitalistic rich pig who's living high on the hog tryign to impress women at the bar. No, I'm an entreprenuer follwoing my dream to create a successful business/legacy to feed my family. I alwso want to creat jobs for others in the community. Quit attacking me! I'm the one providing commerce here. How many jobs has government ever created?!?! Imagine if you cut that $70K in taxes in half and gave me $35 k back. I'd hire a part time worker and reinvest the rest of the money back into the business purchasing more goods/services from others. Surely I can spend my money better than the governemtn!!

  • Booga

    “Surely I can spend my money better than the governemtn!!”

    Well, you could take some spelling lessons. Maybe a course or two on avoiding cliches in both your writing and your thinking…..

    OR you could just leave Washington state for some place more business friendly. How about Texas or Alabama? I'm sure you'd fit right in there.

  • Peter

    Hey Camden – I think you got your lists the wrong way round – House has Custom Software Development and more taxes, Senate has fewer.

  • Kensails

    We are paying 16K in B&O taxes this year even though we only netted 40K for the year. How is that fair. So we work harder than any state employee yet we only get to keep 24K of the 40k we earned. How is that fair. Go ahead, make a comment about how rich I am.