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B&O tax proposal would increase B&O revenues by 24.2% over the forecast in 2027–29

PSSB 5815 and PSHB 2081 would increase business and occupation (B&O) taxes. The bills include a temporary surcharge and permanent rate increases. According to the draft fiscal note, the proposal would increase revenues to funds subject to the outlook (NGFO) by $2.442 billion in 2025–27 and by $3.943 billion in 2027–29 (the first biennium it […]

New tax proposals would include the state’s largest tax increases

The new tax package proposed by House and Senate Democrats this week includes five proposals to increase revenue. These and two other major tax bills are scheduled for executive session in the Senate Ways & Means Committee tomorrow. All would make the list of the state’s largest tax increases. They include: The table shows the […]

Bills would increase capital gains tax and estate tax rates

Increases to the capital gains tax and estate tax rates are included in the new tax package proposed by House and Senate Democrats. (I wrote about their B&O and sales tax proposals earlier.) SB 5813 and HB 2082 are identical; fiscal notes are not yet available. Capital Gains Tax The current capital gains tax rate […]

Sales tax proposal would apply the sales tax to more services (and includes a budget gimmick)

The new tax package proposed by House and Senate Democrats this week includes SB 5814 and the identical HB 2083. The bills would subject more services to the sales tax and more products to the other tobacco products tax. They would also require businesses to make a one-time prepayment of sales tax collections. (Fiscal notes […]

B&O tax proposal would permanently increase tax rates and impose a temporary surcharge

Several new tax bills have been introduced in the Legislature this week. PSSB 5815 and HB 2081 would increase business and occupation (B&O) tax rates. Taxes paid by Washington businesses are already the 10th highest in the country on a per-employee basis, and Washington businesses already pay about half of all state and local taxes. […]

Washington is not a low tax state, and our fiscal system is more progressive than you think

University of Washington economist Jacob Vigdor writes (of Washington), “We don’t spend very much because, in the grand scheme of things, we don’t tax very much. In a recent analysis by the Federal Reserve Bank of Minneapolis, Washington ranked 48th in terms of the net state and local tax rate.” This is the paper he […]

House Democrats propose $13 billion in new taxes

House Democrats released their tax proposals today. They include a financial intangibles (wealth) tax, business and occupation (B&O) tax surcharges, and an increase to the property tax growth limit. Altogether, House Democrats estimate that these proposals would increase revenues by $13.1 billion over four years. The estimated maintenance level shortfall is $8.7 billion. The table […]

Washington’s revenues are not volatile, and the budget shortfall is the result of legislative choices

Senate Democrats released a video earlier this week to discuss some of the reasons Washington is facing a budget shortfall. It is not accurate. First, Ways & Means Committee Vice Chair for Finance Frame says, “Our state relies on sales taxes, which fluctuate with consumer spending, making revenue unpredictable.” This characterization of sales tax revenues […]

To close an estimated $8.7 billion maintenance level shortfall, Senate Democrats propose $17 billion in net new taxes

Today Senate Democrats released their revenue proposals for the 2025–27 operating budget. (The budget itself will be released on Monday.) They would impose a wealth tax (dubbed the financial intangibles tax) and a payroll expense tax, increase the property tax growth limit, and repeal several tax exemptions. They would also reduce the state sales tax […]

NGFO revenues are now forecasted to be $844 million lower than in the November forecast

The Economic and Revenue Forecast Council (ERFC) now estimates that revenues from funds subject to the outlook (NGFO) will be $844 million lower over the outlook period than anticipated in the November 2024 forecast. Compared to the November forecast, the forecast for the current 2023–25 biennium increased by $55 million, to $66.445 billion. The forecast […]