cutting tax giveaways as a budget reduction alternative

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CuttingTax Giveaways

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BudgetReduction

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Washington Federation of State Employees/AFSCME

Nov. 28, 2011


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Table of Contents

Sensible Solution 2

Other Voices: Doing Nothing is Not an Option 3

Overview of Ideas for Cutting Tax Giveaways 8

Eleven Ideas from the Economic Opportunity Institute 9

Nine Ideas from Our Economic Future Coalition 11

An Idea from Sightline 12

An Idea from WFSE/AFSCME 12

Two Ideas from the Citizen Commission on Performance

Measurement of Tax Preferences 13

Three Ideas from Senate Bill 5947 13

Appendix: Governors Recommendations 14


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Most of the budget gap, says Marilyn Watkins, policy direc-tor at the Economic Opportunity Institute, could be paid forby repealing tax breaks such as the one the state provides tobanks for prots they make on home mortgages.

Theres absolutely no evidence that that tax break has doneany good for consumers in Washington or homeowners inWashington state. The only benet is to banks who have got-

ten their big bailout and are doing quite well now.

Gov. Chris Gregoire has expressed concerns that endingtax breaks could cost the state jobs. However, Watkins saysthere is no evidence the breaks produce jobs, adding that$167 million in new revenue could come from the bankingsector alone each year. By ending similar tax breaks and ap-plying modest tax increases to oil reneries, high-tech andagribusiness, she estimates that $1 billion a year in progres-sive revenue could be generated....

By cutting so much, were not only hurting peoples oppor-tunity and life chances and even their ability to live at all insome cases, but its hurting our economies too.

Watkins blames that last round of budget cuts for slowingthe pace of the recovery, which she says cost the state asmany as 45,000 jobs. More job losses are in store, she says,if lawmakers focus solely on budget cuts during the specialsession.

If we cut another $2 billion, thats about 15,000 jobs thatwe are going to lose in the private and public sector acrossthe state.

Sensible Solution:Cutting Tax Giveaways to Raise Revenue for

Public Safety

Public Services

Higher Education

-- Washington News Service, 11/21/112


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Cuts to higher education system could well be catastrophic

A report issued by the Washington State Budget & Policy Center, a

Seattle-based, progressive think tank, conrms that the higher educa-

tion impacts noted here are applicable around the state.

The report said:

The average cost to attend college in Washington state has risen 94percent since 2007 at four-year institutions and has risen 54 percent at

community and technical colleges. Current proposals would cut an ad-

ditional 15 percent of state support from higher education.

More than 20,000 eligible students were unable to receive nancial

aid in 2010 due to insufcient state resources. Financial aid for 70,000

students is on the line in the next round of budget decisions.

The study demonstrates the dramatic shift in higher education funding

policies in this state over a relatively short period of time.

-- The Olympian, 11/21/11 http://www.theolympian.

com/2011/11/21/1885099/cuts-to-higher-education-system.html#storyli

The Schrammie: An unconscionable plan

Saving money by sacricing the elderly and vulnerable.

Trimming the budget by turning out those who cant fend for them-

selves.

Id like to invite Western State Hospital ofcials to turn off the

electro shock therapy machine and come on down.

Facing yet another shortage of state cash, the state psychiatric hospital

is working up a plan to dump elderly mental patients into community

nursing homes and caretaker homes that are not equipped to deal with

them....

Targeting the vulnerable; plotting to send violent and aggressive

mentally ill patients to area nursing homes is, quite frankly, unconscio-

nable.

If Western State authorities think thats an answer to budget shortfalls,

they need to think again.

-- KOMO TV 9/28/11

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DOC rule changes leave thousands of offenders unsupervised

SEATTLE -- Tragedy is inevitable, according to insiders at the Depart-

ment of Corrections.

A KOMO 4 Problem Solver investigation has uncovered disturbing

information about new DOC rules that are putting thousands of sex of-

fenders on the street with little or no oversight. These rules drastically

change how they keep tabs on dangerous sex offenders.

Victims Katie, Annie and Rob fear they are living on borrowed time.

The criminals convicted of sexually assaulting them or their loved ones

are free. And because of policy changes and new laws, no one from the

Department of Corrections is watching.

They are just three of thousands of offenders no longer getting any

DOC supervision. Rob sums it up this way: Its an accident waiting to

happen.

DOCs community corrections ofcers still keep tabs on thousands of

offenders across Washington state, making unscheduled visits to homes

and workplaces for the worst offenders.

But over the past couple of years, legislators enacted huge changes,

cutting more than 80 positions to save some $25 million. Now thou-

sands of sex offenders who used to be intensively supervised arent.

I think the public could be safer, said Iris Peterson, a community

corrections ofcer who spoke to KOMO News in her role as a unionspokeswoman. When asked if it was just a matter of time before these

changes result in tragedy she answered, It could be, unfortunately.

-- KOMO TV, 10/31/11

And she looked at me and stopped breathing

UNIVERSITY PLACE, Wash. -- Keisha Lewis took her last breath in

her best friends arms, and now that friend is speaking out about the

burst of violence that shattered a family.

Latasha Taylor was with Lewis Monday night when she was stabbed

to death outside of her University Place home. Investigators believe

Lewis former boyfriend, Joseph A. Lester, brutally murdered her be-

fore eeing with their 9-month-old daughter....

Lester is now in jail, and were learning more about why he wasnt

under state supervision at the time of last nights murder.

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A judge ordered Lester to be supervised for 36 months when he was

released from prison on a robbery conviction in 2009. But thanks to a

newly-passed law, Lester was not under supervision.

The Department of Corrections was forced to stop supervising 10,000

offenders after a 2009 law was passed to save money, and because

Lester was classied as low or moderate risk, he was one the offenderslost in the shufe.

Lawmakers said research showed ending the minimal supervision for

these types of offenders wouldnt increase crime rates. A report on the

impact of the new law will be presented to the legislature next month.

Meanwhile, the governor has ordered the DOC to look at even deeper

cuts due to a growing budget shortfall.

-- KOMO TV, 11/1/11

State Budget Cuts A Direct Threat To Spokane Community?SPOKANE, Wash. -- A $2 billion revenue shortfall has Washington

Governor Chris Gregoire preparing to make drastic cuts to many state

programs. The Department of Corrections is on that list.

Community corrections ofcers in Spokane said thats a direct threat

to the publics safety.

Ten years ago Kevin Duane Musgrove was convicted of 1st Degree

Child Molestation. When he got out of jail he was placed on proba-

tion, but budget cuts shortened the length of time that he was super-vised. Now the state is looking to cut budgets again.

I think our number one concern is public safety, and were in the

community too, Tim Foley, a Department of Corrections Employee

said. We think about our neighbors, our family, our friends, Foley

added.

Tim Foley has worked for the Department of Corrections for 36 years.

He knows that each offender has a different story. It varies case to

case, Foley said.

However, community corrections ofcers are worried that the most

recent budget cut proposal would mean offenders such as Musgrove

wouldnt get any supervision.

And some of these guys you cant get them to change. You need to

supervise them, and know what they are doing at all times. Again for

pure public safety, Foley said.-- KXLY TV, 11/4/11

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Supporters say the closures would integrate patients in communities

instead of having them live on campuses set apart from the rest of

society. Opponents say the closure will rip residents away from a homewhere they have lived for decades and away from the care they need.

Lakewood resident Bob Gees daughter Angela has been a resident of

Rainier School for more than two decades. Twice, he moved Angela to

a smaller institution. Both times, he said, she almost died from seizures

because there were not enough employees to watch over her 24 hours

a day.

Its very admirable to believe that they could live on their own, but

when you have someone with the ability of a 2-year-old or 3-year-old,its wishful thinking, he said. Its naive and its deadly to believe that

these people can be integrated into society.

Gregoires list of recommendations....closes the Rainier

School for the developmentally disabled near Buckley.

-- Tacoma News Tribune, 10/27/11

When same plan was proposed last year:

-- Associated Press, 2/14/10

Eliminating Washingtons Basic Health Plan will hurt econom-

ic recovery

The health-care needs of these residents wont disappear just because

public programs go away. When individuals dont have health cover-

age, they seek help from hospital emergency departments. That means

were treating people when theyre sicker and we are treating them inan expensive setting that is not geared toward chronic-disease manage-

ment or prevention.

It also means higher costs and longer wait times for those who do have

coverage.

The Basic Health program has played an important role in extending

the safety net to provide coverage to many low-income people who

cant afford to purchase coverage on their own and dont qualify for

Medicaid. Its much easier to retain an infrastructure than to build a

new one from scratch.

Simply put, leaving people without health insurance lengthens the

recession and imposes costs on us all. We agree with Gov. Chris Gre-

goire her initial all-cuts budget isnt one that the Legislature should

adopt. The Basic Health program should not fall victim to budget cuts,

especially now, when theyre needed more than ever.

-- Seattle Times, 11/21/11

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Closing NYC could be catastrophic; JRA closure would ripple

through Naselle, county

NASELLE While planning to save Naselle Youth Camp as they

have in the face of several previous closure threats, key community

members warn of crippling economic and social consequences if the

state reform school is shuttered as recommended by the governor.

-- Chinook Observer, 11/8/11

Survey says: NYC ahead of JRA average for residential treat-

ment programs

NASELLE In April 2011 the Quality Assurance Team from the

Juvenile Rehabilitation Administration (JRA) collected data from

across their residential programs addressing areas related to treatment

received and how the treatment and skills will work outside the JRA

facility. The results of the survey were overwhelmingly positive for

Naselle Youth Camps (NYC) overall performance as an extremelyeffective rehabilitation facility in Washington.

-- Chinook Observer, 11/15/11

(State Sen. Ed) Murray said interpreters are needed to help prevent

health problems for patients and legal liabilities....

The budget also requires the state to revamp its interpreter system,

which now pays about eight independent brokers, who in turn farm

out work to foreign-language agencies that do the hiring and assigning

of interpreter work. A new system due after Jan. 1 eliminates brokers

and uses online scheduling tools.

Federation organizer Sarah Clifthorne said the double-layer of ad-

ministration led to 44 percent of state payments going to middlemen.

There also were illogical assignments with Tacoma-based interpret-

ers going to jobs in Seattle and vice versa, she said.

With the changes, Clifthorne said, the state will stop wasting money

and it will help interpreters make a living. Right now they spend all

their time driving around.

Cut could eliminate interpreters for thousandsAbout 70,000 Washington residents who have limited English may lose

access to interpreters during medical visits under a proposed budget

cut. -- Associated Press 12/11/10

On the chopping block again--even though Medical Interpreters haveproven value for the state:

-- The Olympian, 7/3/11

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Here are just 27 tax giveaways that six groups propose cutting. The special legislative session could raise $2.3

billion by closing them. Thats more than enough to cover the $2 billion budget decit. There may be some

overlap. But we can all agreecutting tax giveaways is better than devastating cuts to public safety, public

services and higher education.

GROUP/IDEA SAVINGS

Economic Opportunity InstituteRepeal 1st mortgage deduction $ 50.8 millionRepeal 1st mortgage deduction for banks in more than 10 states 20.0 millionSales tax exemption on custom software 31.2 million

Salestaxonnancialplanning,investmentadvising,securitiestrading 46.9million B&Opopsyrupcredit/increasepopsyruptax 16.7million B&Otaxexemptionforfarmerswithgrossincomeabove$200,000 32.7million Salestaxexemptionfornon-organicfertilizers,spraysandwashes 44.6million

Usetaxexemptiononextractedfuel 25.6million Non-residentsalestaxexemption 19.3million Motorvehiclefuelsalestaxexemption 803.2million PublicUtilityTaxes(PUT)(modernizeinterpretationofInterstateCommerceClause) 248.5million

Our Economic Future Coalition Privatejets 5.0million

Display items/trade shows 2.0 million Electivecosmeticsurgery 8.0million

Out-of-state coal 11.0 million Out-of-stateshoppers 44.0million Consumerservices 100.0million

Christmas tree production .5 million Fishtaxexemption .340million B&Otaxexemption/shcleaningservices .011million

Sightline (progressive green think tank) Trade-instocardealershipssalestaxexemption 344.0million

WFSE/AFSCME 3%furloughoncorporatetaxbreaks 450.0million

Citizen Commission on Performance Measurement of Tax PreferencesHog fuel 3.2 million

Renewableenergymachinery 40.8million

SB 5947 (An act relating to repealing certain tax exemptions to provide funding for essential government services)Bullsemenusedforarticialinsemination;chickenbedding;propaneornaturalgastoheatchickenstructures 7.041million

TOTAL: $2,355,392,000

.

OVERVIEW: 27 Ways to Cut the Decit by Cutting Tax Giveaways

Budget Reduction Alternatives: Cutting Tax Giveaways November 2011

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11 Ideas from the Economic Opportunity Institute


Revenues to Rebuild Washingtons Economy Ending tax exemptions to restore jobs and opportunityWashington lawmakers have slashed billions of dollars from the state operating budget since 2008, crippling

individuals, schools, and communities in every part of the state. Meanwhile, tax breaks for the wealthiest people

and corporations undercut investments in the education system and infrastructure needed to create jobs and get

our economy moving again.

Its time to modernize Washington tax code by ending tax breaks and expanding the tax base to reect Washing-

tons 21st century economy. Here are some options:

Repeal 1st mortgage deduction $50.8 million

Since 1970, credit agencies can deduct interest earned from loans for rst

mortgages on residential property. JLARC found no evidence that the tax savings

is passed on to consumers, and big banks are proting.

Repeal 1st mortgage deduction $20.0 million

for banks in more than 10 states

Sales tax exemption on custom software $31.2 million

axed in 11+ other states. Would not include canned software.

Sales tax on nancial planning, investment advising, $46.9 million

securities trading

B&O pop syrup credit and increase pop syrup tax $16.7 millionfrom $1 to $2

B&O tax exemption for farmers $32.7 milliion

with gross income above $200,000

Sales tax exemption for non-organic fertilizers, $44.6 million

sprays, and washes

Use tax exemption on extracted fuel $25.6 million

Primary beneciaries are wood product industry and oil reneries. Generallybusinesses that produce and use tangible personal property owe a use tax, but

extracted fuel has been exempt. 45 other states have a use tax; only 1 exempts

petroleum-based extracted fuel.** Based on JLARC estimates.

Nonresident sales tax exemption $19.3 million

change to refund if over $25 per year

Repeal sales tax exemption motor vehicle fuel $803.2 million

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11 Ideas from the Economic Opportunity Institute (continued)


Public Utility Taxes (PUT) (modernize interpretation of $248.5 million

Interstate Commerce Clause):

Repeal PUT exemption on Instate portion of interstate transportation -Public Utility Tax tax is not charged on the transportation of goods or people if

any part of the trip is out-of-state. JLARC recommends ending the exemption.

46 states and DC already tax.* $30.6 million

Repeal PUT exemptions on through freight and shipments to ports -

Two PUT deductions were enacted in 1937 specically dealing with goods

transported from one part of the state to another for storage or processing, then

transported out of state. JLARC also recommends ending it. 45 states tax.

$23.7 million

Repeal jet fuel tax exemption for commercial airlines and local commuter

business -

A jet fuel tax of 11 cents per gallon has been limited to private purchasers to

support local airports and avoid violation of the US Constitution. But the funds

are now used more broadly to benet all aviation and the interstate commerce

clause has been reinterpreted to allow broader taxation. Only 2 other states

exempt fuel for use in interstate commerce.* $55.2 million

Repeal sales tax exemption on items used in interstate commerce -Air, rail, and water transportation companies engaged in interstate or foreign

commerce are exempt from sales tax on fuel and other items. U.S. Supreme

Court has ruled that states may tax such items, and many do. JLARC review in

2008 found no clear purpose for the exemption. At least 10 states explicitly tax

airline fuel.* $139 million

SOURCE: http://www.eoionline.org/state_economy/

index.htm; Revenues to Rebuild Washingtons Economy;

A Jobs and Economic Recovery Plan for Washington.

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9 Ideas from Our Economic Future Coalition


Protect Our Future End Unfair Corporate Tax Giveaways

Special tax giveaways cost Washingtonians billions of dollars every year. Thats money that should be going

healthcare, education and other essential public services. Below are some examples of unjustied corporate tax

giveaways.

Special tax break for private jets: $5 million per year $5 million

Owners of private jets currently pay a at fee, regardless of the size or value of

their jet. Very wealthy private jet owners should pay their fair share.

Sales tax exemption for display items for tradeshows $2 million

Sales tax break for elective cosmetic surgery $8 millionIncludes: teeth whitening, and laser eye surgery.

Sales tax break for out-of-state coal: $11 million per year $11 millionSales tax is exempt on coal used at coal-red thermal electric generation facilities.

Sales tax break for out-of-state shoppers $44 million

Currently, out-of-state shoppers from Oregon, some Canadian provinces, and other

states that have a sales tax rate of less than 3 percent are not required to pay the

sales tax on purchases made in Washington.

Sales tax break for consumer services $100 million

Includes: hair removal, massages, movie theaters, beauty parlors, acupuncture,

sporting events, investment advice, and many others.

B&O exemption for Christmas tree production $0.5 million

Fish tax exemption for tuna, mackerel and jack $0.340 million

B&O exemption for sh cleaning businesses $0.011 million

SOURCE: http://oureconomicfuture.org/; taxgiveaways.pdf.

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Sightline

Washingtons $450 Million Tax Giveaway For Cars: Car dealerships versus public education: the legislature

decides.

http://daily.sightline.org/2011/10/27/washingtons-450-million-tax-giveaway-for-cars/

Over at Sightline, Eric de Place has identied a way to knock out one-fth of the

budget shortfall$344 millionby closing a single tax loophole. Even better,

closing the loophole would provide $106 million in tax revenue to local govern-

ments, which are facing revenue shortfalls of their own.

The loophole: A sales tax exemption on trade-ins to car dealerships. Currently,

if you trade your used car for a new one, you only pay sales tax on the value of

the new car minus the value of the trade-in. In contrast, if you sell your old car

without buying a new one, you pay sales tax on the full value of the used vehicle.

Essentially, its a giveaway to car dealerships. It also benets wealthier drivers

with high-priced cars they trade in frequently over low-income people who are

less likely to drive, and more likely to own older cars that they maintain (instead

of trading them in) if they do. -- publicola.com 10/27/11

Trade-ins to car dealerships sales tax exemption7 $344.0 million


WFSE/AFSCME

3% furlough on corporate tax breaks $ 450.0 million

Companies enjoying tax breaks should give three percent back

The state workers union meant to be combative. But last week, in throwing down the political equiva-

lent of a schoolyard taunt, I think they hit on an idea with legs. Specically what the union said was:

Youre asking us for another 3 percent cut in health benets. How about convening a meeting of corpora-

tions to ask them to give up 3 percent of their tax breaks? -Danny Westneat, Seattle Times, 10/30/11

According to the state Department of Revenue, there are 567 tax exemptions,

incentives and breaks in the state tax code that, if they were all repealed in full,

would raise $15 billion in revenue for the government.Obviously, doing that would be outrageous. But what if the corporate world was

asked to give the same as the unions three? Not a 3 percent increase in their

base tax rates. Just forgo 3 percent of the value of their tax breaks (which by their

nature are special carve-outs, anyway.)

That would be $450 million in new revenue. Amazingly enough, thats enough so

we dont have to throw the poor off health insurance, dont have to cram school

classes any more than they are and dont have to slash the university system.

-Danny Westneat, Seattle Times, 10/30/11

SOURCE: http://daily.sightline.org/2011/10/27/washingtons-450-million-tax-giveaway-for-cars/; http://publicola.com/2011/10/27/sightline-heres-a-tax-loophole-that-could-save-450-million/.

SOURCE: http://seattletimes.nwsource.com/html/dannywestneat/2016643494_danny30.html.

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Citizen Commission on Performance Measurement of Tax Preferences


Hog Fuel to Produce Energy (Sales & Use Tax) $3.2 million

Provides sales and use tax exemptions for hog fuel used to produce electricity,

steam, heat, or biofuel. The Legislature did not specically state a public policy

objective for these preferences; however, it did make the preferences temporary.

Because of the sharp declines in oil and natural gas prices occurring at the time that

the preferences were enacted, JLARC infers that the Legislature may have intended

to temporarily make the price of hog fuel more competitive. Allow to expire: Be-

cause the Legislature intended the exemptions to be temporary and did not provide

performance goals to guide any other assessment of performance.

Renewable Energy Machinery (Sales & Use Tax) $40.8 million

Provides sales and use tax exemptions for renewable energy machinery and equip-

ment used directly in generating electricity from wind, sun, fuel cells, biomass

energy, tidal or wave energy, geothermal resources, anaerobic digestion, and tech-

nology that converts otherwise lost energy from exhaust, or landll gas into elec-

tricity. The Legislature did not specically state the public policy objective of these

preferences; however, it did make the preferences temporary.

JLARC infers that the Legislatures public policy objective was to encourage and

support generation of electricity using renewable energy sources on a temporary

basis. Allow to expire: Because the Legislature intended the exemptions to be

temporary and did not provide performance goals to guide any other assessment ofperformance.

Summary of 2011 Tax Preference Performance Reviews -- Recommended Repeals:

Senate Bill 5947

An act relating to repealing certain tax exemptions to provide funding for essential government services

Bull semen used for articial insemination; chicken bedding; propane or

natural gas to heat chicken structures $7.041 million

Under current law, there are retail sales and use tax exemptions for the following:(1) sales to ranchers of semen used for articial insemination of livestock; (2) sales

to farmers of propane or natural gas exclusively used to heat structures that house

chickens that are sold as agricultural products; and (3) sales of bedding materials to

farmers who raise chickens for sale as agricultural products.

Summary of Bill (Proposed Substitute): The retail sales and use tax exemptions

for semen used for articial insemination of livestock, sales of propane or natural

gas exclusively used to heat structures that house, and sales of bedding materials to

farmers who raise chickens are repealed.

SOURCE: http://www.citizentaxpref.wa.gov/reports.htm.

SOURCE: http://apps.leg.wa.gov/billinfo/summary.aspx?bill=5947&year=2011.

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Appendix

Gov. Gregoires Tax Break Recommendations (11/28/11)

RECOMMENDATIONS TO THE LEGISLATURE

Requires majority vote of the Legislature

FY2013

Estimate1

Convert securities reported as unclaimed property immediately upon receipt Currently, the Department o Revenue must hold most securities such as stocks andbonds received as unclaimed property or at least three years beore they may be sold andconverted to cash. Tis proposal would allow the department to immediately convertinto cash all securities received as unclaimed property. Te cash would be deposited intothe General Fund and may be claimed by the original owners o the securities at anytime. Tis results in a one-time increase in General Fund revenue.

$50,6002

Require local governments that issue building permits to supply subcontractorinformation to the Department of Revenue Tis proposal would require localgovernments (cities, towns and counties) that issue residential building permits torequest at the time o fnal inspection the name, contractor registration numbersand state business license numbers o any subcontractors perorming work on theproject. Tis proposal will help the department combat an underground economyand ensure that subcontractors are paying their taxes and airly competing with otherbusinesses.

2,600

Reduce the time to claim an excise tax refund to four years Currently, businessescan fle reund claims or fve years the current tax year plus the past our years. Tisproposal would shorten time to claim reunds by one year.

2,100

Increase the interest rate on excise tax assessments by 2% to equal the federal short-

term rate plus 4% Currently, the interest rate or excise tax assessments and reundsis 2% above the average ederal short-term rate, adjusted annually. Te rate or calendaryear 2011 is 3%. Tis proposal would increase the interest rate on unpaid taxes anadditional 2%.

1,200

Prohibit delinquent taxpayers from renewing liquor licenses Tis proposalwould require businesses to pay any past due taxes beore their liquor license could berenewed. Te requirement would be waived or any business in a payment plan with thedepartment.

1,000

Impose a $10 ee per invoice issued to a taxpayer or unpaid taxes (balance duenotices, assessments, warrants, etc.) Tis proposal would require a $10 ee or each

billing invoice sent to taxpayers.

900

Impose a $25 ee or the issuance and renewal o reseller permits Tis proposalwould require a $25 ee or the issuance and renewal o reseller permits. Reseller permitsallow businesses to make purchases or resale without paying retail sales tax. Resellerpermits are now ree.

700

TOTAL (REQUIRING MAJORITY VOTE OF THE LEGISLATURE) $59,100

1 Estimates based on the November 2011 forecast unless otherwise noted. Assumes start date of July 1, 2012, for

any new legislation.2This is a one-time sale of accumulated securities. Actual value will vary depending on market value on date of sale.

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RECOMMENDATIONS TO THE LEGISLATURE

Requires 2/3 vote o the Legislature

FY2013

Estimate1

Increase business and occupation (B&O) tax rate on oil companies with windallprofts Currently, oil companies pay B&O tax in Washington at various rates 0.471% or retailing and 0.484% or wholesale and manuacturing. Tis proposal wouldimpose an additional B&O tax o 0.6% o taxable income (or a total o 1.071% or1.084%) i:

a. Te oil company reported, or ederal income tax purposes, a proft (net income) o$1 billion or more in the prior calendar year; and

b. Te proft was 5% or more o its total revenue.

$131,000

Increase B&O tax rate on fnancial institutions with windall profts Generally,fnancial institutions pay B&O tax at a 1.8% rate. Tis proposal imposes an additional1.5% B&O tax rate (or a total o 3.3%) on fnancial institutions i:

a. Te fnancial institution reported a proft (net income) o $1 billion or more inthe prior calendar year; and

b. Te proft was 5% or more o its total revenue.

53,800

Repeal sales tax exemption or purchases made by nonresidents (rom states with

a sales tax o


18/18

Limit B&O tax preferences for meat processors, fruit and vegetable processors TeWashington Supreme Court expanded this preerence or butchers to include productsthat contained any amount o meat. Tis proposal restores the original legislative intentthat the tax preerence apply only to raw and perishable meat, not products such ascanned chili. Te proposal also applies to a similar preerence or ruit and vegetableprocessors.

900

Close B&O tax loophole that allows out-of-state printers to sell into Washington

without paying B&O tax Te department has been unable to collect B&O tax romout-o-state printers that sell into Washington. Tis proposal would end this loophole.

114

TOTAL (REQUIRING 2/3 VOTE OF LEGISLATURE) $282,114

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cutting tax giveaways as a budget reduction alternative

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