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Published on Friday, March 3, 2017

City business license and tax bills EHB 2005 passes House and ESSB 5777 passes Senate

City business license and tax proposal EHB 2005 passed the House with a vote of 96-2. While we were actively negotiating with the bill sponsors and stakeholders on potential amendments, ultimately only a few changes were made to the bill before it passed out of the House. This includes extending the date for cities to choose to participate in FileLocal instead of the business licensing system to one year, from July 2017 to 2018. The amended bill also changed responsibility for staffing and chairing the workgroup of cities and businesses on apportionment of service income under RCW 35.102.130 from the Department of Revenue to the Municipal Research and Services Center (MRSC).

Meanwhile, SSB 5777 passed the Senate with a vote of 44-0. This Senate bill has similar provisions, but the amendments adopt a more flexible approach to exemptions to joining the business licensing system for hardship, and to choose to use the alternative city-operated FileLocal tax and licensing system.

At this time, either bill could be a vehicle for final legislation, and ESSB 5777 is more favorable to cities. AWC will continue to work with the business community, with the hope that any final version of the bill achieves the goals of assisting businesses by streamlining the license process, and protecting local authority.

Categories: Budget & finance