Tax & Fiscal Policy2017-2018 Legislative Objectives
A number of fiscal challenges face lawmakers in the 2017-19 biennium. Fully funding pension obligations, maintaining an adequate safety net, and amply funding K-12 education are prominent among those challenges. Since the state Supreme Court’s 2012 McCleary decision, the legislature has made significant investments in basic education, having made steady progress complying with the court’s ruling. Despite recent progress, the legislature must take action in the 2017 session—addressing teacher compensation and district reliance on local property tax levies—in order to meet the 2018 deadline. Additionally, 2017 will see discussions on how to address major changes to and interpretations of tax laws that have resulted in uncertainty, inconsistency, and inequitable treatment for taxpayers.
Washington’s employers are under constant pressure. Washington collects the 4th highest business share of state taxes, and the 6th highest business share of state and local taxes among the 50 states. It is imperative that 2017-19 legislative challenges are met and resolved in a way that does not inhibit Washington’s ability to attract, maintain, and grow economic opportunity statewide, compete with lower-cost states, and upholds certainty and fairness for taxpayers.
AWB supports legislation to:
- Balance the state budget while promoting and protecting economic development opportunities and state competitiveness rankings.
- Protect the predictability of the tax code and structural tax incentives, such as those for aerospace, agriculture, manufacturing, and small businesses, from any attempt to add requirements or barriers.
- Ensure taxpayers are treated fairly and equitably by strengthening the Taxpayer Bill of Rights and reform the appeals system and processes to:
- Allow for independent review of Department of Revenue decisions without a requirement to pay the underlying taxes.
- Change the unreasonably high burden of proof placed on taxpayers that challenge property valuations to the more widely used standard of the “preponderance of the evidence.”
- Provide greater transparency, ensure consistent treatment, protect taxpayer confidentiality, and assist taxpayers in understanding department rules and interpretations.
- Create a fairer and more efficient tax appeal process.
- Update, clarify or affirm tax laws to provide technical clarity and ensure legislative intent is met. Clarify that digital automated services are an exempt business input, and detail specific business activities that would be defined as digital automated services.
- Reduce regulatory red tape and administrative burdens facing employers including, but not limited to, consolidation of the annual survey and report.
- Update systems to allow for state level centralization of business tax filing and reporting for all cities with license requirements and/or B&O tax, similar to current sales and use tax reporting. Ensure cities are accurately and timely communicating changes to local B&O tax and utility tax rates, and working to better align and simplify city and state nexus and apportionment rules.
For More InformationFor questions, please contact AWB’s Eric Lohnes at 1-800-521-9325 or EricL@awb.org.
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