State relies heavily on businesses for revenue

Jan 14, 2021
Written by wpengine

Washington State ranks at or above the average of other states in business taxes, according to a new Washington Research Council policy brief.

In fiscal year 2019, businesses paid almost half of all state and local taxes, the brief reports. In that year, Washington ranked at or above other states in taxes per employee in annual business tax revenue growth, taxes per employee, business taxes as a share of economic activity and the share of total state and local revenue paid by business.

The report is timely because the Legislature is considering several tax proposals in the 2021 session. Washington Retail is urging restraint on adding new costs because the COVID-19 pandemic including related forced business closures have driven the economy into recession and record unemployment. New taxes would only threaten further economic decline and hardships on companies and employees.

The report shows that Washington businesses paid $23.1 billion in state and local taxes, an increase of 6.6% from fiscal year 2018. The average growth rate across the 50 states was 5.7%. Washington’s state and local business tax revenue grew at the 18th fastest rate in the country.