The Senate Ways and Means Committee spent Monday afternoon holding hearings on three major tax bills.
Senate Bill 5961, prime sponsored by Senator Rebecca Saldaña (D-37), would adopt an 8.9 percent capital gains tax. This tax would hurt our small retailers when it comes time to sell their business and retire. While the bill recognizes the potential impacts on small businesses the exemption threshold is far too low to have any meaningful impact.
Senate Bill 5997, prime sponsored by Senator Christine Rolfes (D-23) would make the non-resident sales tax exemption a yearly remittance program. This would definitely impact all sizes of retailers, especially along our border with Oregon – a sales tax-free state. It is estimated that over $850 million in sales are attributed to the non-resident exemption. Most of these sales would not take place if a remittance program is adopted. We fear there would be job loss and business closures if this bill passes.
Senate Bill 5998, prime sponsored by Senator Joe Nguyen(D-34), would raise the real estate excise tax for properties over $1 million dollars. This bill will particularly hurt commercial transactions. It will be a double hit for small business owners that sell their business to retire. Not only will they pay capital gains but they will be on the hook for a higher real estate tax.
Washington Retail opposes all three of these bills. While the funds raised go to very worthy causes, there is no reason that these causes can’t be funded by the robust revenues that our state has realized over the last several years in this growing economy and low unemployment. The state should be able to balance the budget and pay for the programs that citizens need within existing revenues.
The bills are now part of the larger budget debate that has started between the Senate, House, and Governor’s office. A budget must be adopted before the Legislators can adjourn, scheduled for April 28.