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Large tax package draws broad support and opposition at Ways and Means hearing
Summary
House Bill 2,081, a sweeping business‑tax package that raises base B&O rates, adds temporary surcharges on the largest taxpayers and hikes an advanced computing surcharge, drew extensive testimony for and against funding priorities ranging from education and care services to business competitiveness.
Senate staff presented an engrossed substitute to House Bill 2,081 that would increase base B&O rates for several tax classifications, add a temporary 0.5% surcharge on very large taxpayers and raise the advanced computing surcharge rate and cap. Committee staff explained the bill is projected to raise several billion dollars in revenue over four years and includes targeted exemptions and thresholds intended to limit the largest impacts.
Supporters urged passage to shore up education, health and social services. Emma Scalzo of Balance Our Tax Code summarized the argument: “Our state needs a tax system that works for everyone, not just the wealthiest people and businesses.” Several caregivers and union members testified the revenue is needed to maintain services such as home care, child welfare and health care for vulnerable populations.
Opponents from key business sectors warned of immediate operational impacts and asked for narrower changes. Amber Carter of the Washington Retail Association said retail already bears costs in collecting sales tax and urged preserving the historical differential in B&O rates: “We really implore you to keep that differential, keep our rates as low as possible.” Industry groups including the Association of Washington Business, Washington Roundtable, Washington Hospital Association, and construction and wholesale representatives urged amendments or exemptions for affected sectors and for small businesses.
The proposal included exemptions for some industries — timber, certain fuel sales, advanced computing firms under certain conditions — and a phase‑in threshold that limits some rate increases to firms with larger annual receipts. Opponents warned the combined effect of B&O increases, proposed health sector cuts, and other potential new taxes could reduce investment and increase costs to consumers.
Ending: The committee took extensive testimony from labor, advocacy organizations, local officials, small‑business representatives, and large‑industry trade groups. No vote was recorded at the hearing; committee staff noted amendments were due to staff by the next noon and the matter will return to the committee for amendment consideration.
