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Tue., Jan. 21, 2014, 10:16 a.m.

WA Lege Day 9: B&O tax bill panned even by sponsor

OLYMPIA -- A bill to give all businesses in Washington the same low Business and Occupation Tax rate, cutting some $1.8 billion out of state coffers next year, is a bad idea several people told the House Finance Committee.

Including the bill's sponsor, Rep. Larry Haler, R-Richland.

Haler said he proposed HB 2110 after last fall's special session to extend tax preferences to Boeing in an effort to land the production facilities for a new jetliner. "A lot of people are saying 'Why can't we have the Boeing deal?'" Haler told the committee.

Among those wondering most were farmers, who Haler said were "just scraping by" and who some members of the Legislature "are trying to get at" because they think farmers are wealthy.

Haler's bill would make almost every business's B&O tax rate .29 percent of gross receipts. The state currently has 12 different rates across 51 business classifications with many paying between .47 percent and 1.5 percent.

But Haler's bill would more than double the rate of .13 percent that farmers currently pay, Committee Chairman Reuven Carlyle, D-Seattle, said.

Rep. Cary Condotta, R-East Wenatchee, asked if Haler had any ideas on how the state would replace an estimated $1.8 billion in revenue in fiscal 2015 and $4.1 billion in the following two years.

No, said Haler. "I Would never advocate an income tax. There are probably other options out there." 

The proposal also doesn't address all the tax exemptions and breaks the state has written into its tax code, Rep. Gerry Pollet, R-Seattle, said.

Haler agreed: "The state shouldn't be in the business of picking winners and losers."

Such a major change in tax policy probably can't be done in a short 60-day session, he said, but the Legislature should at least consider a special study of equalizing the B&O tax rate. 

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Jim Camden
Jim Camden joined The Spokesman-Review in 1981. He is currently the political reporter and state government reporter in the newspaper's Olympia bureau office.

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