Posts tagged: tax exemptions
OLYMPIA — Legal marijuana growers in Washington will not get any of the tax breaks other farmers get, under a bill passed today by the Legislature.
The House gave final passage to a bill that makes marijuana farming different from any other agricultural product, and not eligible for various exemptions or credits for business and occupation, sales or utility taxes.
Thousands of would-be pot growers have applied for licenses and the Liquor Control Board, which regulates recreational marijuana under Initiative 502, began awarding licenses last week. They'll have to make their new operations work without the kind of tax help the state gives many other new industries.
House Finance Committee Chairman Reuven Carlyle, D-Seattle, said other agricultural producers get help to keep them competitive with farmers in other states, which also offer tax breaks. But marijuana farmers won't have that kind of competition, because growing marijuana remains illegal in most other states, he said.
If the marijuana industry needs help down the road, the Legislature can always consider tax breaks in a future session, Carlyle said.
But legal marijuana growers do have competition, Rep. Cary Condotta, R-East Wenatchee, said, from illegal growers who pay no taxes or fees to the state. Without tax breaks, legal recreational marijuana might be so expensive that people won't switch from the black market, and the system the state sets up will be “destined for failure.”
Legal growers will get no breaks from the state or federal government and pay a 25 percent excise tax on sales to processors, who will pay a 25 percent tax on sales to retail stores. The stores will add another 25 percent excise tax, plus a sales tax, to consumers.
An estimate by the Office of Financial Management said will collect some $25 million over 10 years on the taxes that marijuana businesses will pay, that many other businesses don't.
The bill passed on a 55-42 vote, Speaker Pro Tem Jim Moeller ruled it didn't need a two-thirds supermajority because it didn't change any provision of I-502.
OLYMPIA — A unanimous Senate voted to bar tax breaks for the state's fledgling marijuana businesses.
On a 47-0 vote, it passed SB 6505, which says the state's new marijuana entrepreneurs who have filed for licenses to grow, process and sell recreational marijuana won't be eligible for various tax preferences that other businesses might enjoy.
Marijuana is not an agricultural commodity, and growers won't get certain tax breaks farmers who grow other crops receive. The bill excludes marijuana and marijuana-infused products from which eliminates the ability for persons in that industry to take advantage of tax breaks for agriculture. Marijuana businesses will also be ineligible for eight B&O tax preferences; 16 sales and use tax preferences; four additional excise tax preferences; and four property tax preferences, two for real property and two for personal property.
The bill was sent to the House.
OLYMPIA — Democrats on the House Finance Committee approved a $900 million package of tax increases this morning designed to pay for increases in public school programs. Republicans voted no, saying the state should increase money for schools without raising taxes.
On an 8-5 vote, the committee approved House Bill 2038, which ends some business tax exemptions, shrinks others and extends some taxes passed in 2010 as temporary.But first they pared back some of the increases they originally proposed, dropping new or extended taxes on beer, insurance agents, stevedores and janitors.
Money raised from those tax changes would go into a trust fund to pay for changes in the state's public education system, which the state Supreme Court has said must be improved.
“We have tough, difficult choices,” Chairman Reuven Carlyle, D-Seattle, said. “We're asking everyone to contribute to our quality of life.”
But Rep. Terry Nealy, R-Dayton, said the committee was “taking a butcher knife to these businesses, rather than a scalpel. We're picking winners and losers among our businesses.”
He and other Republicans also noted the Senate budget spends an extra $1 billion on public schools without raising taxes.
“We don't need new taxes to balance our budget,” Rep. Ed Orcutt, R-Kalama, said. “It's the courage to fund education first and say no to some other people that we need.”
Republicans also tried unsuccessfully to add a clause requiring the tax increases to be sent to voters in November. Carlyle argued it was the role of the Legislature to close tax exemptions it has approved over the years that may no longer be working as they were initially intended.
The bill now goes to the House for a vote sometime later this week.
OLYMPIA — Voters get to weigh in on two more ballot measures in November, a pair of advisory votes on changes to tax law the Legislature approved this year.
One involves petroleum taxes, the other involves a tax break for large banks on mortgages.
They're advisory votes, so the Legislature isn't bound by them. They're required by Initiative 960.
They will add about 16 pages to the state Voter's Guide, which will be coming out in the fall.
To read the ballot language, go inside the blog.
OLYMPIA – Motion Picture State Tax Exemption, take 2. And, action.
The Senate again approved the extension of a tax break for movies and television shows shot in Washington. The exemption, first offered in 2002, expired last year because the House failed to act on it last session, after it was approved in the Senate. On Tuesday, the Senate sent it back to the House on a vote of 40-8.
Supporters said the exemption is needed by the state's film industry, which includes production companies like North by Northwest in Spokane, as well as cameramen, actors and makeup artists. It’s difficult for them to compete for work when 44 other states offer some sort of incentive.
It also helps tourism by showing Washington locales, Sen. Sen. Maralyn Chase, D-Shoreline said, at a time when the state's tourism budget for advertising has been cut.
Opponents like Sen. Rodney Tom, D-Bellevue, said some tax breaks have to go because of the state's budget problems, and the return on investment is far less than many other exemptions.
But Senate Majority Leader Lisa Brown, D-Spokane, who wrote the original legislation to offer tax breaks to the film industry a decade ago, said the bill involves a tax credit the state carefully scrutinizes to ensure accountability for jobs.
“We are sustaining jobs,” Brown said. “It adds to the diversity of our economy to help the arts.”
The bill now returns to the House. Last year it got caught in “end game dynamics” which supporters hope it will avoid this year, she said.
OLYMPIA — Legislators have until Dec. 28 to find ways to close the projected $1.4 billion budget gap, and maybe ask voters to raise the state sales tax to save some programs.
Some legislators of both parties have expressed doubt that they can do it in the time allotted, and the fact the regular 2012 session follows the special session by about two weeks has them suggesting some things may just have to wait.
This kind of talk does not sit well with Gov. Chris Gregoire, who called them back for this emergency session with the idea of getting the messy budget stuff out of the way as soon as possible, so savings can start accruing. If the Legislature doesn't agree by the end of the month to put a half-cent sales tax before voters, it can't go on the March ballot.
“I've heard a lot of skepticism from legislators on whether they can get the job done. I'm not willing to accept that,” she said Thursday. “Is there job tough? Absolutely. It's the reality we face today.”
She also took shots at some proposals to increase state revenue without raising the sales tax, as she has suggested, or other taxes. One of them is to expand casino gambling off the reservations. “Voters said, not all that long ago, 'No,'” she said.
Another one, particularly popular with protesters who continue to march in and around the Capitol, is an end to a tax exemption banks have on first mortgages. That might raise $18 million, which doesn't close much of the budget gap, she said. Closing any tax loophole will take a two-thirds majority in the Legislature and “that just isn't going to happen,” she said.
OLYMPIA – From frozen bull semen and chicken bedding to big banks’ mortgage profits, Senate Democrats took aim at the state’s system of tax breaks for businesses Wednesday.
They generated support from people who don’t want the Legislature to close the projected $5.1 billion gap in the state budget solely with cuts, including the Service Employees International Union, the American Association of Retired Persons and the Our Economic Future Coalition.
They generated opposition from the business owners who said they need the various tax credits, exemptions and preferences to stay afloat, including the state Retailers Association, Farm Bureau and Association for Washington Business.
And sometimes, the Senate Ways and Means Committee hearing generated chuckles or applause from an overflow crowd as members tried to sort through three different bills on tax breaks…
OLYMPIA — Senate Ways and Means Committee may generate the most excitement of the special session to day, with a hearing on several proposals to change tax exemptions, thus bringing in more revenue and mitigating the need for as much as $5 billion in cuts to the 2011-13 budget.
Senate Democrats have several proposals for cutting back on tax preferences (substitute “loopholes” if you prefer), including a reduction in the break for investments, for some agricultural items like bull semen and bedding material for chickens, and a plan to remove the two-thirds majority for changing tax exemptions.
Progressive groups are likely to show up in large numbers in support. Tim Eyman has called for his troops to come to Olympia to protect the supermajority on taxes that they've won over the years at the ballot box.
Earlier in the day, the Senate was floor action on some bills necessary to make the budget work. They might also have a resolution honoring the troops involved in the mission that got Osama bin Laden.
OLYMPIA – When the party that’s in becomes the party that’s out, one can expect an increase of unhappy people coalescing and demonstrating against the new order.
But if one is aligned with the party that’s in, and those leaders aren’t doing what one thinks are the right things, is it still possible to raise the call, assemble the troops and storm the barricades?(All together now: “Aux armes, citoyens/Formez vos battalions, marchon, marchon…” *)
Groups generally allied with the Democratic Party may discover that this week in Olympia. Labor unions, progressive community action groups, social service organizations and others plan four days of escalating protests in the Capitol, starting Tuesday. They’ll demand something that legislators have repeatedly said they won’t do: