Washington’s Balanced Budget Requirement

Washington State's Legislature has passed a bill (SB 6636) which implements on Washington State a balanced budget requirement that requires that all Washington State spending be sustainable over a 4 year period. This is a statutory protection.

The Washington Policy Center has more analysis here, and the balanced budget requirement doesn't take effect until the 2017-2019 budget.

Washington State’s Tax Costs on Business: comparison to other states

The Tax Foundation has released its study "Location Matters, a Comparative Analysis of State Tax Costs on Business."

Washington State ranks 17^th overall for mature operations and 40^th overall for newly established operations. Selected key findings from the study for Washington State are summarized below. The study can be accessed here. The data is searchable by state and Washington's summary is here.

Mature Operations

• Best ranking: Retail stores & call centers: WA ranked 4^th
  • Tax burden for retail is 28% below the national average and 33% below national average for call centers.
  • Main Reasons:
    • WA has no income tax at either state or local level (although it does have a Business and Operations (B&O) tax).
    • WA has a relatively low property tax burden for these operations.
• Worst ranking: Corporate headquarters: WA ranked 46^th.
  • Tax burden on Corporate HQs is 42% above national average.
  • Main Reason: Although WA has no income tax and a low property tax burden, WA has the highest sales tax costs and among the highest costs for unemployment insurance (UI).

New Operations

• Best ranking: New Retail. WA ranks 17^th for new retail operations.
  • Tax burden is on average 8% below national average.
  • Reason: Low income tax and property tax.
• Worst ranking: New Corporate Headquarters. WA ranks 49^th.
  • Tax burden (total) is 81% above the national average.
  • Reason: highest sales tax burden in nation combined with above-average UI costs and gross receipts tax.

Washington State B&O Tax Credits

Washington State has recently reinstated the "Motion Picture Competitiveness Program." This program offers a B&O tax credit to Washingtonians that contribute to a Washington motion picture competitiveness program. The credit is limited to the lesser of $1M or 100% of the contributions made by the person to a program during a calendar year. The motion picture competitiveness programs are designed to help bring film production to Washington State. The definition of a "motion picture" includes all types of video delivery including the internet.

The bill as passed can be found here.

America: Highest Corporate Tax Rates in the World!!!

As of April 1, the United States of America now has the highest combined corporate tax rate in the world. The US's combined state and federal rate is 39.2% and Japan (the next highest) is now 38.01%.

The Tax Foundation has great analysis and put together the following table.

City looking to raise local taxes hits up charities to pony up…

Lowell, MA, has found a way to boost its local tax revenue. The city's plan is to force nonprofits to make "payment in lieu of taxes" which is "equal to 25 percent of the equivalent residential property tax bill." Lowell's story can be found here.

Groups that have state property tax exemptions are generally thought to provide public benefits for the public good. Arguably, many nonprofits could be severely hurt if property taxes were imposed. For some municipalities like Lowell, however, find this untapped revenue stream just too good to pass up in times of low tax revenue for local jurisdictions.