Business Lobby Wants Intangible Property Eliminated From Tax Rolls

When tax collectors clobbered a Washington businessman with a 15-fold increase in the assessed value of his place of business last year, efforts to exempt “intangibles” from the state property tax got a big lift.

H&R Block franchisee Ronald Smirsich saw the value of his office in an Olympia strip mall shoot up overnight from $24,506 to $365,652. A Thurston County tax appraiser decided that while the real estate itself didn’t amount to much, the “good will” attached to H&R Block’s name was worth a bundle - a whopping $347,471 to be exact.

Tax officials later reversed themselves, says Tom Dooley of the Association of Washington Business lobby. But the cause celeb case may be helping to remove such intangibles from this state’s property tax rolls.

A bill passed by the Senate would eliminate intangibles as a source of property taxes. The legislation had a hearing by the House Finance Committee last week and is scheduled for a vote this week.

“We’re getting a lot of support,” said Dooley, “and the outlook is quite good.” AWB has made the intangibles bill one of its highest tax priorities this season.

Small-business operators and franchisees especially are victimized by what AWB’s director of fiscal policy says is a patently inequitable tax. There is, Dooley said, simply no common basis for calculating the value of taxable intangibles such as reputation, integrity, logos, patents, and so forth.

A just-released policy brief by the Washington Research Council concludes that, “The taxation of intangible property presents a serious challenge to the operation of a uniform system of taxes.”

The council, an independent think tank, notes that while the Legislature has considered several methods of trying to make taxing intangibles more uniform, “fully exempting intangibles seems to be the cleaner solution to the problem.”

Dooley adds, “The other top tax issue still unresolved is a rollback of the remaining half of the 1993 increase in the state business and occupation tax.” Gov. Gary Locke vetoed a measure enacted by legislators, but AWB is lobbying for a veto override.

“Whether we can still get it done this year or we have to wait until 1998,” Dooley said, “we think there is commitment on both sides of the aisle to a rollback.”

Rural development workbook available

The Sustainable Community Checklist, a “hands-on workbook for rural community development,” is now available from the Northwest Policy Center at the University of Washington.

The publication guides rural citizens through a self-analysis that explores principles of sustaining communities, based on years of research by the center.

Cost of the workbooks is $12.50. Call (206) 543-7900 or write to: University of Washington, Northwest Policy Center, Box 353060, Seattle, WA 98195-3060.

Boise, Pullman/Colfax added to CPI

Boise boosters are ballyhooing a U.S. Labor Department announcement that the Bureau of Labor Statistics will start gathering local data for the Consumer Price Index.

Press dispatches out of Boise boast that Idaho’s capital city is one of 36 new areas of the United States where the bureau will collect data to track changes in the prices of goods and services. The government will interview 400 businesses and households in the Boise area for the local sample.

How does Boise rate inclusion in the CPI, and Spokane doesn’t? Spokane/Coeur d’Alene far surpass Boise and its environs, not only in population but in terms of impact on prices in a broad market area.

On the surface that’s true, agrees Bureau of Labor economist Todd Johnson at the Department of Labor’s Western region headquarters in San Francisco. But, the statistical analyst says, size and importance don’t necessarily carry a lot of weight with the bureau. “It’s very mysterious,” he said of the selection process for the CPI, “and difficult to explain.

“Sometimes even we ourselves don’t understand why some cities get selected and others don’t,” he said.

“But politics can play a big role,” he confessed. “For example, we have no reason in the world to be collecting data in Anchorage, Alaska. But we do it.”

Then he rubbed salt in Spokane’s wounds: “In the Pacific Northwest, the only other new metropolitan areas being added to the CPI data sample within the next year,” he said, “are Bend/Redmond, in Oregon, and Pullman/Colfax in Washington.”

Pullman/Colfax!

This may be just sour grapes, but if it’s any consolation to Spokane supporters: Boise, Bend/Redmond and Pullman/Colfax may get their data collected, but it won’t do them any good. The news out of Boise didn’t divulge this, but statistics gathered for the national CPI are used to compile local CPIs in just 26 places. The only Pacific Northwest cities that get local CPIs compiled and published by the Bureau of Labor Statistics are Seattle and Portland.

, DataTimes MEMO: Associate Editor Frank Bartel writes a notes column each Wednesday. If you have business items of regional interest for future columns, call 459-5467 or fax 459-5482.

The following fields overflowed: CREDIT = Frank Bartel The Spokesman-Review