As we’ve written, the substantial budget surplus means that the Legislature will not need to increase taxes to maintain current services. Moreover, tax cuts could be considered. Several bills have been pre-filed that would either reduce or (in a few cases) increase taxes. Although there are no fiscal notes available yet, here are some proposals of interest:

HB 1858 (Stokesbary) would reduce the business and occupation (B&O) tax on manufacturers from 0.484% to 0.2904%. The B&O tax on manufacturing semiconductor materials would be reduced from 0.275% to 0.165%. The bill would eliminate the B&O tax on manufacturing grain, seafood, dairy, fruit, vegetable, and meat products. It would reduce the B&O tax on extracting, manufacturing, and selling timber products from 0.2904% to 0.2384%. It would reduce the public utility tax on urban transportation businesses from 0.6% to 0.24%; on motor transportation, railroad, and tugboat businesses from 1.8% to 0.72%; and on log transportation businesses from 1.28% to 0.512%.

SB 5696 (Braun) would repeal the capital gains tax.

SB 5557 (Hasegawa) would exempt new businesses from the B&O tax for their first two years of operation. However, it would also impose an additional B&O tax on all other businesses to offset the loss of revenue from exempting new businesses. (The bill will be heard by the Senate Committee on Business, Financial Services & Trade Jan. 13.)

SB 5554 (Hasegawa) would allow local governments to impose graduated income taxes if they reduce local sales and use, public utility, property, or B&O taxes.

HB 1846 (Berg) would extend the sales and use tax exemption for data center server equipment. It would also allow sales tax exemptions for data centers in King, Pierce, and Snohomish counties. To receive the exemptions, businesses would have to certify that they used community workforce agreements or project labor agreements and paid prevailing wages.

HB 1819 (Leavitt) would increase the property tax exemption for personal property from $15,000 to $100,000 and adjust the limit for inflation, if a constitutional amendment allowing this (HJR 4208) passes.

SB 5515 (Dozier) would add a B&O tax credit of $275 for each hospitality industry job created in counties with unemployment rates that are at least 25% greater than the statewide rate.

HB 1643 (Hackney) and companion SB 5642 (Mullet) would exempt from the real estate excise tax sales to entities that plan to use the property for low-income rental housing. (HB 1643 will be heard by the House Committee on Finance Jan. 13.)