April 12, 2010 in City

‘Enough’ Senate votes to pass taxes anticipated

By The Spokesman-Review
 

2010

Legislature

OLYMPIA – State senators are expected to vote sometime today on the same $667.7 million tax package that passed the House of Representatives on Saturday, and vote as well on the operating budget and capital projects budget to take the state through the rest of the biennium.

Although she hedged Saturday on whether at least 25 Democratic senators will support the tax plan, Senate Majority Leader Lisa Brown said Sunday she was confident she would have the minimum needed to pass it Monday.

Asked if she would have more, Brown, D-Spokane, replied: “The goal is to have enough.”

Some Democrats said they wanted to look at the spending plans as well as the tax proposal. The state faces a $2.8 billion shortfall between the amount of revenue it expects to collect and what it would pay out for all wages, programs and services currently in law. The $668 million, along with another $101 million from a proposed cigarette tax increase, would fill part of that gap; cuts, transfers from other state funds and federal money would cover the rest.

Republicans in both chambers have been united against any tax increases since the regular session began in January, arguing the state needs to cut more spending, reduce wages and benefits for state workers, streamline some agencies and shed others, including the state printing office and state liquor stores. The tax plan passed the House 52-44 on Saturday, with all Republicans and a handful of Democrats voting no.

Here are the major tax increases in the latest tax package, the amounts they would raise, and when they would take effect (if temporary, when they are scheduled to end is also listed):

•$242 million from a business and occupation increase on most service businesses except hospitals and some research and development activities, to 1.8 percent from 1.5 percent of gross receipts, May 1, 2010-June 30, 2013.

•$155 million from eliminating B&O tax exemption for out-of-state firms using direct-seller representatives in Washington, May 1, 2010.

•$85 million from changing B&O tax requirements for out-of-state companies with higher than certain levels of property, employees or receipts in Washington. Other changes affect some banks, investment firms, newspapers and costs of loans for commercial aircraft, June 1, 2010.

•$59 million from an additional 50 cents per gallon on beer (28 cents per six-pack). Only applies to brewers who make more than 60,000 barrels, so large national breweries would be taxed and local microbreweries exempt, June 1, 2010-June 30, 2013.

•$33.5 million from an additional tax on carbonated beverages of 2 cents per 12-ounce can; first $10 million in sales exempt, July 1, 2010-June 30, 2013.

• $33 million from sales tax imposed on bottled water, which currently is exempt as a food; exemptions for bottled water for prescriptions; refunds given to people without potable water, June 1, 2010-June 30, 2013.

•$30.5 million from sales tax imposed on candy and gum; state candy manufacturers get a $1,000 per employee job credit, June 1, 2010-June 30, 2013.

•$8.5 million from increased authority for the state Revenue Department to go after certain tax-avoidance transactions, May 1, 2010.

•$7 million from B&O tax levied on certain previously exempt property management companies; nonprofit companies and those who contract with a housing authority retain current exemption, June 1, 2010.

•$4 million from new limits on the B&O preferential rate for certain canned, dried or smoked meat products and some byproducts; new limits also for some processed fruits and vegetables, May 1, 2010.

•$3.6 million from reduced limits to the deductions some loan companies can take for the fees and charges on first mortgages, June 1, 2010.

•$2 million from applying B&O tax to corporate directors, July 1, 2010.

Four other tax changes total less than $2 million.

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