WA Sales Tax Proposals
- Jan 6, 2012 | Will Frei
Yesterday two freshman Washington State legislators, Rep. Chris Reykdal (D-22) and Sen. David Frockt (D-46) proposed legislation that would radically alter Washington tax law.
The proposal includes the following:
- Doing away with the state's 1.8% business and occupation tax.
- Lowering Washington's sales tax from 6.5% to 5%.
- Introducing a 1% tax on adjusted gross income and on gross profits for businesses.
- Extending sales tax to personal and professional services, including advertising, veterinary services and legal help.
These new laws would bring in an estimated $500 million in new revenue per year and would go into effect in 2015 (the same year that Governor Chris Gregoire's proposed half-cent sales tax increase would expire).
Reykdal and Frockt have named their proposed legislation The Higher Opportunity Promise for Education (HOPE) Act. The revenues generated from the legislative changes would go into the Education Levy Trust Account, which pays for higher education. Reykdal pointed out that the introduction of the HOPE Act coincides with the WA State Supreme Court ruling that the state has consistently failed to provide adequate funding for a basic education program.
The Hope Act is sure to provoke spirited debate, especially since Washington does not currently have an income tax and income tax proposals have been rejected numerous times over the past 10 years. On the Washington State House Democratic website, Reykdal is quoted, saying, "What we propose is the single most comprehensive overhaul of our tax system in the state’s history, but more importantly, what we propose is common sense,” said Reykdal. “I look forward to working with legislators on both sides of the aisle on this foundational issue.”