House Bill 1111 by Rep. Eileen Cody (D-Seattle) would eliminate the Business and Occupation Tax deduction for all taxpayers except individuals for investment income. The bill was heard on Tuesday of this week before the House Finance Committee. If enacted, Washington state would be the only state in the country to do this.
Many businesses depend on investment income to keep their operations profitable and operating efficiently. This will fundamentally force businesses of all sizes to rethink how they are structured.
Interestingly and almost more disturbing is that this measure will impact non-profits as well. Every service club with a foundation, every alumni association with a scholarship fund, every community non-profit that depends on and budgets for investment income would have to pay the B & O tax on their earnings.
HB 1111 can be declared “necessary to implement the budget” so it is immune from cut-offs – hence the hearing after the House of Origin deadlines last week.
I hope for the sake of thousands of businesses and even more non-profit charities that this bill is not moved forward and included in a final budget agreement. Please oppose House Bill 1111.