Governor urged to sign manufacturing tax relief bill that received strong bipartisan support in Legislature

Business groups are encouraging Gov. Jay Inslee to sign SB 5977, a bill that provides a phased in reduction of B&O taxes for manufacturers. The bill received strong bipartisan support, passing the House 83-10 and the Senate 33-16.

Association of Washington Business president Kris Johnson said in a statement on the adopted state budget,

“This budget also includes some important elements for employers, including a reduction in the business and occupation tax rate for general manufacturing. The manufacturing sector is vital to the health of the state’s economy, not only through its direct support of high-wage careers, but also through the ripple effect it creates. For every worker in manufacturing, there are another three employees hired elsewhere. Despite this benefit, Washington is a high-cost state for business — employers currently pay 58 percent of all state and local taxes. Lowering the B&O rate for manufacturers provides a welcome measure of relief for employers, particularly small businesses, and will help them compete in a regional, national and global economy.”

The governor signed the budget last Friday, but the tax relief is provided in separate legislation. AWB reports in Fast Facts

As a budget deal came together last week, negotiators agreed to lower business and occupation (B&O) tax rates for small manufacturers. Starting in 2019, B&O tax rates for general manufacturers will be reduced by 40 percent, creating one rate for all manufacturers. This bill will help rural areas in particular, where manufacturing is a crucial pillar of the economy, providing a ripple effect that supports other jobs in small communities.

The B&O tax reduction could help more than 10,000 employers become more competitive. Eric Lohnes, AWB government affairs director for tax and fiscal policy, said the bill is welcome support for the job creation that comes from a stable manufacturing base. That’s especially important because Washington is a high-cost state for manufacturing, he said.

The Seattle Metropolitan Chamber of Commerce urges Chamber members to write the governor in support of the bill.  From the Times story:

Chamber CEO Maud Daudon wrote [the bill] would provide “much-needed relief to manufacturing employers, and support ongoing economic prosperity across our entire state.”

The Seattle Times reports some members of the Legislature are calling on Inslee to veto the bill.

Twenty-three Democratic state representatives signed a public letter to Inslee asking him to veto the tax cut contained in Senate Bill 5977

Inslee will announce his decision on the tax cut Friday.