The Washington State Tax Structure Workgroup has been meeting for several years and one of their proposals to the legislature is to replace the Business and Occupation Tax with a Texas style Margins Tax. While the B&O Tax has long been loathed as unfair based on gross receipts without deductions, the one saving benefit is that it is very easy to calculate and understand. A Texas style Margins Tax would allow deductions for costs of goods sold and/or payroll – both of which are significant in the retail industry. While legislators on the workgroup have said the intention is to be revenue neutral and make the tax system more equitable, there are winners and losers. This legislation will pit industry against other industries. WR will continue to follow this prosed legislation closely.