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Olympia staff outline B&O tax options, small‑business exemptions and possible revenue impacts
Summary
City staff presented scenarios for changing Olympia’s business-and-occupation (B&O) tax rate and the city’s “no tax due” threshold, described likely revenue outcomes and warned of tradeoffs for downtown programs that rely on B&O credits.
City Manager Jay Bernie and finance staff outlined three revenue scenarios for Olympia’s business‑and‑occupation (B&O) tax on May 13, saying the council was not being asked to decide but to understand impacts as it plans the 2026 budget.
The presentation by Brandy Andrews, the city’s tax and licensed financial analyst, showed that raising the retail classification rate from $1 per $1,000 of gross receipts to the legal maximum of $2 per $1,000 would increase city B&O revenue by about $2.6 million annually in the model used by staff. Combining a retail rate increase with a larger “no tax due” threshold — the level below which taxpayers pay $0 — produced different outcomes: pairing a retail rate increase with raising the threshold from $20,000 to $200,000 yielded roughly $2.3 million in additional revenue; doing both and using a $500,000 threshold produced an…
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