Legislature overrides Lowry's veto of B&O tax cut
by Jeff Switzer
Washington businesses will receive a long-awaited reduction in the state's business and occupation tax as the State Legislature voted last week to override Gov. Lowry's veto of the tax cuts.
This bill rolls back about 50 percent of the B&O tax increases the legislature enacted in 1993, returning $132.4 million to the state's economy.
Lowry vetoed the bill on Jan. 22, but the legislature gathered the necessary two-thirds majority Jan. 24 to override, the House voting 76-21 and the Senate 41-7.
The tax cut applies to service providers, such as lawyers, doctors, barbers, architects, bakers, engineers, real estate dealers, and accountants.
Rep. Dave Schmidt, R-Bothell, said these cuts should have been in place seven months ago.
"It's a shame that we've had this unnecessary delay caused by the governor's opposition and a lack of cooperation across the rotunda," said Schmidt. "The B&O tax has been a real burden on small business trying to succeed and grow, and perhaps even more on the employees who rely on these small businesses for their livelihoods."
The rollback takes effect Jan. 1, 1996, and includes several provisions. The legislation:
Local lawmakers voting for the override were:
- Reduces the selected business services rate, from 2.5 to 2 percent;
- Reduces the rate for other business services, from 2 to 1.75 percent;
- Reduces the financial services business rate, from 1.7 to 1.6 percent;
- Expands the distressed area job creation tax credit to $2,000 for each job created.
1st District: Sen. Rosemary McAuliffe, D-Bothell; Rep. Mike Sherstad, R-Bothell; Rep. Ian Elliott, R-Kirkland.
44th District: Sen. Jeanine Long, R-Bothell; Rep. Dave Schmidt, R-Bothell; Rep. Bill Thompson, R-Everett.
45th District: Sen. Bill Finkbeiner, R-Redmond; Rep. Bill Backlund, R-Redmond; Rep. Kathy Lambert, R-Redmond.