The final day of legislative action was marked by the approval of more than $9 billion in new state and local taxes, which were signed into law by Governor Ferguson. Key measures affecting the retail sector include:
- Increases to the Business & Occupation (B&O) tax
- A new sales tax on services, which is expected to impact small retailers
- Property tax increases
- Elimination of several tax preferences
WR recognizes the need to address the state’s budget shortfall and acknowledges the complexity of the decisions involved. However, we remain concerned about the potential impact these tax increases may have on retailers, including higher consumer prices and tighter profit margins for businesses.
Several major policy bills also passed in the final days of the session:
- SB 5284 – Packaging & Recycling (EPR): This bill establishes an Extended Producer Responsibility (EPR) program, making Washington the seventh state to adopt such a plan. However, no state has fully implemented an EPR program yet. Retailers and consumers should expect increased costs.
- SB 5041 – Unemployment Insurance for Striking Workers: This bill provides up to six weeks of unemployment benefits to striking workers. WR has serious concerns about the legality of this measure, which appears to conflict with federal law. If upheld, it could deplete the state’s unemployment trust fund and raise employer taxes during the next major strike.
- HB 1213 – Paid Family & Medical Leave Expansion: This bill removes the small business exemption from the paid family and medical leave program, placing additional cost and compliance burdens on our smallest members. Unfortunately, this move disregards the original agreement between business and labor.
- HB 1308 – Employee Access to Personnel Records: This bill increases employer liability and is likely to lead to more legal actions against businesses.
- SB 5786 – Spirits Licensing Fee Increases: This bill raises fees for spirits licensing, impacting many retail businesses.
On a more positive note, SB 5408 was enacted, providing a limited right to cure for inadvertent job posting errors. This important measure should help reduce the number of unnecessary lawsuits being filed against employers.
HB 2015, related to public safety funding, is covered in a separate article.
This was a challenging, and quite literally “taxing”, legislative session. WR remains committed to supporting our resilient retailers, their employees, and customers as they navigate the impacts of these new laws.
