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January 23, 2018

Manufacturing B&O tax relief back on the table

By: Bobbi Cussins   Comments: 0

Manufacturing is the backbone of Washington state's economy. But, it could use some support.

A pair of lawmakers have introduced bills early in the 2018 session that would do exactly that.

This week, Sen. Michael Baumgartner, R-Spokane, along with Democratic Sens. Steve Hobbs of Lake Stevens and Mark Mullet of Issaquah, introduced Senate Bill 6542. The bipartisan measure would reduce the business and occupation (B&O) tax rate for manufactures from 0.4840 percent to 0.2904 percent over four years. The change would bring all manufacturing businesses down to the same rate as aerospace manufacturers.

Co-sponsor of the bill, Sen. John Braun, R-Centralia, noted in a press release that manufacturing has lost 56,900 jobs since 2000, more than 47,000 of which are in manufacturing sectors outside of aerospace.

This proposal comes on the heels of a bill Rep. Brandon Vick, R-Felida, introduced last week to reduce the B&O tax burden for Washington manufacturers.

Both bills aim to restore the tax relief that a bipartisan majority of legislators agreed to last year as part of the overall two-year state budget. Shortly after passage, the governor vetoed the tax relief provision.

What would the tax relief mean for small- and medium-sized manufacturers?

Two family-owned manufacturers – Vaughan Company, Inc. in Montesano and Out of the Box Manufacturing in Renton – explain how easing the tax burden on their operations would unleash investment in workers and job creation in videos released this month.

“Reducing the B&O tax rate for manufacturers would allow us to hire more employees, increase employee benefits or reinvest in our facilities,” said Allison Budvarson, co-founder of Renton-based Out of the Box Manufacturing, in her video.

For more information on this issue, to testify on behalf of this or similar legislation or to participate in a video like the two below, contact AWB Government Affairs Director Clay Hill at 360.943.1600.