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Gregoire’s other tax proposals

Gov. Chris Gregoire's proposed half-penny sales tax increase got plenty of attention Monday, but she also rolled out more than $340 million in additional tax plans she wants lawmakers to consider.

Among them are increased business and occupation tax rates on windfall profits earned in the oil and financial industries to a new luxury tax on automobiles with pricetags over $50,000. Gregoire also suggests imposing additional reporting requirements on local building permits to help crack down on tax-evading subcontractors. Most of the proposals would require an almost-impossible-to-achieve two-thirds supermajority in each legislative chamber, but about $59 million in new revenue could be achieved by simple majority because Gregoire contends it would involve fees and slight policy adjustments.

Gregoire submitted an all-cuts spending plan to balance the state's current budget, which is suffering from an estimated $2 billion shortfall that's forcing lawmakers back to Olympia next week for a special session. But she's also hoping the Legislature and taxpayers will agree to ease the deep cuts in in education and other services by increasing taxes.

A look at the sales tax plan is in today's edition of The Spokesman-Review and can be found at the above link or here.

Click here for the full descriptions of the additional tax proposals that Gregoire supplied lawmakers. Here's a summary, including the amount of projected revenue each would raise during the 2013 fiscal year:

Section One involves proposals Gregoire believes could be approved by simple majority of the Legislature.

  • Convert securities reported as unclaimed property immediately upon receipt ($50.6 million).
  • Require local governments that issue building permits to supply subcontractor
    information to the Department of Revenue ($2.6 million).
  • Reduce the time to claim an excise tax refund to four years ($2.1 million).
  • Increase the interest rate on excise tax assessments by 2% to equal the federal shortterm
    rate plus 4% ($1.2 million).
  • Prohibit delinquent taxpayers from renewing liquor licenses ($1 million).
  • Impose a $10 fee per invoice issued to a taxpayer for unpaid taxes such as balance due
    notices, assessments, warrants, etc. ($900,000).
  • Impose a $25 fee for the issuance and renewal of reseller permits ($700,000).

Section Two involves proposals Gregoire believe would require a two-thirds supermajority.

  • Increase business and occupation (B&O) tax rate on oil companies with windfall
    profits ($131 million).
  • Increase B&O tax rate on financial institutions with windfall profits ($53.8 million).
  • Repeal sales tax exemption for purchases made by nonresidents from states with
    a sales tax of less than 3% ($23.4 million).
  • Limit the B&O tax deduction for first mortgage interest to community banks, defined as those with branches in 10 or fewer states ($18.1 million).
  • Impose 5% luxury tax on passenger motor vehicles with pricetags over $50,000 ($14.2 million).
  • Impose 1.5% gross receipts tax on gambling and lottery winnings ($13.1 million).
  • Increase the cigarette tax 25 cents from $3.025 to $3.275 ($12.4 million).
  • Impose public utility taxes (PUT) on developmental disabilities supported living
    services at 5.029% to help leverage more federal money ($11.6 million).
  • Close B&O tax loophole that allows companies to create shell corporations outside
    the state to reduce their Washington tax liability ($3.5 million).
  • Limit B&O tax preferences for meat processors, fruit and vegetable processors (900,000).
  • Close B&O tax loophole that allows out-of-state printers to sell into Washington
    without paying B&O tax (114,000).


David Wasson oversees coverage of politics and state and local government and assists with editing on the City Desk.

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