Raise the B&O Tax Level for Small Businesses

Washington State has the honor of being the top state for creation of new businesses and infamous as the top state for business failures. Our population is extremely entrepreneurial. One item that causes a new small business to struggle is the state Business & Occupation tax. A new business must complete a Washington State Business & Occupation state form and pay taxes starting at $12,000 per calendar year. In addition to paying the tax, the entrepreneur must take the time to fill out the monthly forms. How can a business survive on such a small revenue amount?

Washington State needs to raise the minimum level for payment of B&O taxes from $12,000 per calendar year to at least $250,000. At this level, the business is still small and struggling, but it is at least more likely to survive. If Washington State raised the minimum amount to $250,000, this would exempt over 178,000 companies (70% of the companies who filed returns in 2003). The amount paid by these companies represent less than one percent (0.08%) of funds paid into the state general fund.

What a great way to support small businesses in the State of Washington!

Below is a summary of B&O taxes paid by all businesses in the State of Washington in the calendar year of 2003. The figures were provided by the Department of Revenue.

Size of Firm Based on Gross	# of Firms	Total Gross	Total Taxable	Total Tax due
Less than $250,000	178,401	11,368,565,546	10,766,654,292	90,839,024
Less than $500,000	205,036	20,841,745,194	19,589,685,184	161,004,211
Less than $750,000	217,542	28,504,864,896	26,642,899,164	217,481,067
All Firms	256,714	400,881,238,597	318,741,074,486	2,060,066,781
Total General Fund				11.3 billion

Please consider eliminating B&O taxes on companies with revenues less $250,000.

Cross posted at Island Republican www.islandrepublican.blogspot.com

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