While state lawmakers propose a plan to address the $16 billion budget deficit, a local business leader says the taxes — and tariffs —will devastate businesses.
OLYMPIA, Wash. — Washington Democratic lawmakers have proposed a range of new taxes to fight a major budget crisis.
The state is facing a budget deficit of $16 billion over the next four years.Â
State Democrats previously said they prefer a budget that recoups revenue through new taxes instead of making cuts to state programs, putting them at odds with Democratic Gov. Bob Ferguson, who said he saw any new taxes as a last resort.Â
Senate Bill 5813 would apply a 2.9% excise tax on the sale or exchange of stocks and bonds over $1 million. That’s in addition to the state’s existing capital gains tax, which is a 7% excise tax on the sale or exchange of capital assets over $250,000.
The bill also increases the estate exclusion amount to $3 million and provides annual inflation adjustments.
Lawmakers are also proposing a property tax hike under Senate Bill 5812, which would allow raises up to 3% per year. Currently, taxing districts are only allowed to raise property taxes by 1% per year.
Another bill would increase the business and occupation (B&O) tax, and add a surcharge for larger companies.Â
Senate Bill 5815’s proposed taxes include a hike from .484% to .5% for standard businesses, research and development nonprofits and insurance agents, among others.
For businesses with an income of over $1 million, the proposed tax would be upped to 2.1%. It also adds an extra .5% B&O surcharge on taxpayers making over $250 million.
Rachel Smith, the CEO of the Seattle Metropolitan Chamber of Commerce, said new state taxes on top of tariffs would be devastating for businesses.
“Some of them may raise costs. Some of them may have to lay off staff. Some may change their business models,” Smith said. “If you’re a restaurant, you may be going to counter service. And you know, those are choices they would be forced to make, not choices they want to make.”
Democrats argue new taxes are needed to fix the budget deficit.Â
Gov. Ferguson previously said he won’t sign a budget with a controversial wealth tax, which is not part of the new plan. It would have aimed to collect additional revenue by taxing the state’s wealthiest residents.
Dozens of large corporations in western Washington signed a letter on April 2 to urge state lawmakers to avoid new taxes, including a wealth tax, in the next budget.
The letter, addressed to Gov. Ferguson and House and Senate leadership, was signed by executives from Amazon, Microsoft, the Seattle Mariners, T-Mobile and many others.Â
Lawmakers must pass a final budget by April 27.
This story includes reporting by KING 5’s Alex Didion and Helen Smith.Â
