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Washington: Proposed Budget Would Impact Taxes

  • Dec 20, 2012 | Gail Cole

Outgoing Governor Chris Gregoire (D) has released her final budget plan before leaving office on January 16, 2013, after eight years in Washington State's highest office. Part of her proposal is a call to create a handful of new taxes and extend some taxes that are set to expire in 2013.

Budget Overview 

Governor Gregoire's proposed 2013-15 calls for the following:

  • "a new tax on carbonated beverages;"
  • "repealing the sales tax exemption on candy and gum;" and
  • repealing "a use tax exemption that the state currently provides for fuel produced and used internally by extractors and manufacturers."

Balance Sheet Details

  • The carbonated beverage tax would be .19 cents per ounce, with a $10 million exemption.
  • The sales tax exemption on candy and gum would be repealed, with B&O credit awarded to candy manufactures.
  • A beer tax increase of 50 cents per gallon would be extended through December 31, 2016.
  • A 0.3 surcharge on service businesses would be extended through December 31, 2016.
  • An excise tax on fuel would be imposed, based on the wholesale selling price.

Fuel Use Tax

Gregoire would "repeal a fuel use tax exemption" said to primarily benefit refiners. The new tax on gasoline and diesel fuel would "eventually rise to 4.62%" -- costs that would likely be passed on to consumers.

Governor Gregoire will be succeeded by Jay Inslee (D), who is under no obligation to enact the proposed budget. During his gubernatorial race, Inslee maintained that he would "veto any new tax, except in the case of a revenue package to pay for transportation projects or in the case of tax exemptions that may be repealed."

Two Republican officials also commented on the budget: Representative Gary Alexander of Olympia said  that the governor's "proposed budget will be 'dead on arrival' once session starts in January." However, Senator Andy Hill of Redmond thought Governor Gregoire's budget would be "a 'useful reference' as the Senate prepares its own budget."

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Gail Cole
Avalara Author
Gail Cole
Gail Cole
Avalara Author Gail Cole
Gail began researching and writing about sales tax in 2012 and has been fascinated with it ever since. She has a penchant for uncovering unusual tax facts, and endeavors to make complex sales tax laws more digestible for both experts and laypeople.