Businesses with an annual gross income of less than $1 million will not be subject to the increased tax rate.
Governor Jay Inslee has signed into law a new business & occupation (B&O) tax bill to help fund higher education. The new legislation will restructure the B&O surcharges put into place by last year’s legislation and is expected to generate an additional $234 million over the 2021-23 budget cycle. This additional revenue will fund the Washington College Grant program, a program geared towards making college more affordable for students in Washington.
Lawmakers believe the new legislation will ensure there is sufficient funding to fulfill their promise to make college more affordable, as well as address concerns that arose over implementation due the complexity of last year’s bill.
While WSDA opposed this legislation, it is an improvement over the bill that passed last year. Under the new tax, approximately 15,000 businesses rather than the previous 80,000 impacted businesses will be subject to the new 1.75 percent B&0 tax rate. Businesses with an annual gross income of less than $1 million will not be subject to the increased tax rate.
The new B&O tax goes into effect April 1, 2020
For more information on Washington state’s B&O tax, including how to pay the tax, visit the Washington Department of Revenue’s website