Reps. Chapman, Tharinger sponsor small-business tax bill

OLYMPIA — Reps. Mike Chapman and Steve Tharinger are sponsoring House Bill 2940 with House Finance Committee chair Rep. Kristine Lytton to address business taxes.

Chapman, Tharinger and Sen. Kevin Van De Wege represent District 24 in the state Legislature. District 24 includes all of Clallam and Jefferson counties and part of Grays Harbor County.

The bill, said Chapman in a news release, would consider the gross marginal revenue of a business to determine if it should pay the Business & Occupation (B&O) tax at all.

State law doesn’t allow businesses to deduct the cost of goods they sell or employee costs, like salary, wages and benefits.

To help low-margin businesses, the state would use a new calculation to determine if they should pay the B&O. The calculation starts with the gross receipts, which is what businesses currently pay, and then subtracts the employee costs and costs of goods sold.

That is the “gross marginal revenue” and if it is less than $250,000, the business would pay no B&O.

Businesses with a gross marginal revenue between $250,000 and $1 million would pay the current B&O rate on their gross receipts with no change from the current method.

Large businesses with marginal revenue over $1 million would pay the B&O tax on gross receipts plus a increase on their tax rate.

“The underlying issue is requiring a business to pay taxes on all of the money the business takes in, with no consideration given for the costs of running a business,” said Chapman. “This leaves restaurants and other businesses with narrow margins very little ability to expand or hire new staff.”

Gender pay equity

Chapman and Tharinger also co-sponsored with a number of other House members HB 1506, which is headed to the Senate following a 69-28 House vote.

The bill, known as the Equal Pay Opportunity Act, is designed to help empower equality of pay in the workplace by banning pay secrecy policies, allowing discussion of wages and prohibiting retaliation against workers for discussing their pay or for asking for equal pay and opportunities.

In a news release, Chapman acknowledged that this was the fourth year in a row that the House has sent an equal pay bill to the Senate. Still he voiced optimism that the Senate — which has a Democratic majority this term — will give it support and send it to Gov. Jay Inslee for his signature.

Halibut bill

Every year, the fortunes of area halibut fishers rest on the short fishing season determined by quotas set by the International Pacific Halibut Commission and implemented by the National Marine Fisheries Service.

Last year, and likely again this year, we will have less than two weeks open to halibut fishing in the Puget Sound area.

Whether the fishing days are consecutive or spread out over the course of a week directly impacts how much halibut can be harvested.

Van De Wege has sponsored Senate Bill 6127 to improve the local halibut catch in two ways.

The bill would direct the state Department of Fish and Wildlife to request that the National Marine Fisheries Service structure the recreational halibut season to occur over consecutive days when it consists of several days in a week.

It would also create a $5 catch card for halibut anglers that will enable the state to better track the level of halibut catch and use that knowledge to improve the logistics of the halibut season.

Under the current card process, the state has no way of knowing how many people are fishing for halibut, Van De Wege said. It’s his contention that it will give everyone a better handle on how to proceed moving forward with future halibut seasons.

Telework bill

Van De Wege has also sponsored SB 6016, which is designed to encourage employers to allow “telework” arrangements with employees.

These arrangements allow employees to perform work, usually with a computer and telecommunication lines, for employers other than from their place of work — from their homes or any place with wireless communications.

Under the proposal, employers would be allowed tax credits for telework expenditures that exceed the average made by the employer in the preceding three calendar years or $500 per calendar year per employee who teleworks at least 12 days per month.

“I sponsored this bill to reduce the single largest cause of traffic on our roads, daily commutes, and make it easier for rural employees to work for urban employers,” Van De Wege said in a news release. “Three types of people will benefit from it: business owners, employees, and anyone who commutes to and from work on congested roads.”

“In addition to taking cars off our roads during rush hours, I’m excited by the potential to enable folks who live in quieter rural areas in our district to work for companies in more economically robust areas like Tacoma or Seattle by eliminating the need to commute,” he added.

The bill is scheduled for discussion in executive session in the Senate Committee on Labor and Commerce today.


Assistant Managing Editor Mark Swanson can be reached at 360-452-2345, ext. 55450, or [email protected].

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