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Council adopts updated B&O threshold to match state model ordinance
Summary
Tumwater adopted an update to its business-and-occupation (B&O) tax model ordinance to change the threshold for a no-fee endorsement from $2,000 to $4,000, aligning with state legislation that takes effect Jan. 1, 2026.
The City Council adopted Ordinance O2025-013 to amend Tumwater's business-and-occupation (B&O) tax model ordinance, increasing the threshold for a no-fee endorsement for out-of-city businesses from $2,000 to $4,000. The ordinance change implements a state legislative revision that becomes effective Jan. 1, 2026 and ties the threshold to inflation-adjusted updates.
Troy Niemeyer, the city's finance director, briefed the council on the change and said it affects only businesses located outside the city that do a small amount of business inside Tumwater; businesses physically located in the city are unaffected. "This is a change that was adopted by the state legislature, goes into effect 01/01/2026, and, keeps us adopting this change, keeps us in compliance with the model ordinance," Niemeyer said.
Council members moved and seconded the ordinance for adoption; the council voted unanimously to adopt the update. The change was described in the presentation as a business-friendly adjustment that slightly reduces revenue but is not expected to have a significant fiscal effect.
Authorities referenced: the presentation cited state legislation passed in 2023 that revised the state model B&O ordinance and directed the new threshold; the city amendment brings local code (Tumwater Municipal Code section 5.07.0.07) into alignment with the state model.
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