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Published on Friday, March 11, 2016

Proposal establishing task force on local business tax & licensing simplification passes both chambers

Last week the House and Senate passed HB 2959, which establishes a task force to evaluate options to continue local business tax and licensing simplification. Two significant changes were made to the original version of the bill. First, the bill no longer requires the task force to propose legislation for the 2017 session. Second, it adds two additional members: one from FileLocal and one from the Washington Retail Association.

Here’s a recap of what the bill now requires.

The Department of Revenue must convene a task force that meets at least once per month. The task force will be made up of:

  • One representative from the Department of Revenue, who will serve as the chair
  • Two representatives from the Association of Washington Business
  • One representative from the National Federation of Independent Business
  • One representative from the Washington Retail Association
  • One representative from the Association of Washington Cities
  • One representative from a city with a B&O tax and a population greater than 100,000
  • One representative from a city with a B&O tax and a population less than 100,000
  • One representative from FileLocal

The task force must evaluate the following issues:

  • Options to coordinate administration of local B&O taxes;
  • Options for centralized administration of local B&O taxes for those cities wanting to participate in a state-provided alternative;
  • Options for all cities to partner with the state business licensing service; and
  • Implementation of data sharing and a seamless state and local user interface with FileLocal.

By January 1, 2017, the task force must prepare a report to the Legislature that:

  • Explores additional alternatives to improve local business taxes and licensing; and
  • Examines differences in apportionment and nexus between state and local B&O taxes and how this impacts taxpayers and cities.

The bill directs the task force to consider options with the greatest benefit to taxpayers when developing the report and proposed legislation. The legislation and report must be approved by a majority of the members. A minority report must be issued if the task force does not reach consensus.

Categories: Budget & finance