For years, business groups have sought a way to simplify the state’s myriad municipal business and occupation tax regimens. AWB president Don Brunell devoted his column this week to the issue, indicating support for Gov. Gregoire’s tax simplification proposal.

B&O taxes are assessed on a business’ gross income, regardless of profit. The state imposes a B&O tax, but local jurisdictions do as well. The amount of the local B&O taxes, as well as how they’re calculated, varies from one jurisdiction to the next.

…Under the governor’s proposal, the state of Washington would be the single collector of all local and state B&O taxes, and the state would rebate to each local jurisdiction their share of the tax — similar to how the state currently handles state and local sales taxes.

Five major cities opposed the plan. AWB’s Jason Hagey writes at the Olympia Business Watch blog that the opponents so far are unwilling to compromise. He reports that the cities’ objections have been solidly rebutted.

Early in the session, cities were complaining about the governor’s original proposal, claiming it would cost them millions of dollars.

That prompted a detailed rebuttal from the Department of Revenue, knocking down virtually all of the concerns. It is clear, officials said, that the cities misconstrue the impacts from some parts of the proposal.

Regulatory reform and tax simplification are two positive steps the state can take that will boost business activity. We documented many of these issues in our Thrive Washington series and other WRC reports over the years. It’s time to act.