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Published on Friday, September 8, 2017

Task forces on business licenses and B&O tax apportionment begin work

The task forces created by EHB 2005 had their first meetings in August.

One of the provisions of the bill requires cities to develop a model business license threshold by July 2018 for adoption by all cities with a business license by January 2019.

AWC convened a group of cities to begin drafting a model license threshold on August 22. The next meeting in October will focus on research on city business license systems and existing options for establishing a model threshold. We plan to provide regular updates on the progress of this project as we work towards meeting the deadline to develop the model. If you would like to be added to an email distribution list to receive periodic emails on this topic, please email Sheila Gall.

Another provision of EHB 2005 created a task force chaired by the Department of Revenue to recommend changes to the two-factor formula for service income apportionment for local B&O taxes. The first meeting of the task force took place on August 16, and the task force will meet monthly through July 2018. The task force representatives from cities and the business community both provided their perspectives on issues in administration of the two-factor formula. Based on those discussions, it seems likely the task force will spend most of its time discussing the three-part test for the service income factor of the apportionment formula.

We plan to provide regular updates to cities with a local B&O tax on their work through the Legislative Bulletin and periodic emails.

Please contact Victoria Lincoln or Sheila Gall if you have questions or feedback.

Categories: Budget & finance