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SATURDAY, MARCH 20, 2010, 1:52 P.M.

WA Lege SpecSess: House passes tax bill

OLYMPIA -- The House passed a compromise tax bill suggested by Gov. Chris Gregoire that does not raise the state sales tax but does have a broader increase in business taxes.

In a 53-42 vote, with no Republicans voting for the package, the House stripped away the provisions of the tax package passed Friday in the Senate and approved a package of approximately $700 million in new taxes. Last night they also passed a $1 per pack increase on cigarettes.

Gone is a proposal to raise the state sales tax by two-tenths of 1 percent, which would have raised an estimated $313 million through June 2011. Instead, the House approved a temporary increase of the business and occupation tax levied on most service businesss, raising it from 1.5 percent of gross receipts to 1.75 percent.

 Gone from a previous House proposal is a plan to extend the sales tax to candy and gum

Still in, a sales tax on bottled water, which would start May 1 in an effort to raise an extra $8 million. Visitors from states who have a lower sales tax, or no sales tax, wouldn't get the lower rate in Washington. Custom software designers would pay the B&O tax, but people who get elective cosmetic surgery would not.

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The Spokesman-Review's political team keeps a critical eye on local, state and national politics.