Tax Relief

Tax relief beneficial properties some traction within the Washington Legislature

By BRETT DAVIS

THE CENTER SQUARE

(The Center Square) – A trio of bills in the Washington state Legislature hint at the possibility of some form of tax relief in a state with revenue projections that continue to exceed expectations.

Senate Bill 5932 would reduce the state’s sales tax by a full 1%, taking the tax rate down from 6.5% to 5.5%. Senate Bill 5769 would offer property tax relief. Senate Bill 5897 would suspend the state’s portion of the gas tax for all of 2022, shaving more than 49 cents off the price of a gallon of gas.

Currently garnering most of attention is the sales tax legislation, SB 5932, sponsored by Senate Democratic Majority Caucus Vice Chair Mona Das. It’s estimated the bill, which has bipartisan co-sponsors, would provide approximately $2 billion in tax relief per year for Washingtonians.

“Thanks to our federal, state and local leaders’ careful stewardship during this pandemic – and the public resilience throughout our communities – we are in a strong place financially,” Ms. Das said in a press release. “We should seize this opportunity to live up to our values ​​of a full, equitable recovery and reduce the sales-and-use tax that burdens lower- and middle-income families… We need to take a serious look at tax relief for all working Washingtonians. And this is the year to do it.”

The main focus of SB 5769 would be to exempt the first $250,000 of a primary residence from the state property tax. The bill reads, in part, “This tax relief is intended to reduce the property tax burden for homeowners by providing over $1,000,000,000 a year in progressive property tax relief.”

The legislation as proposed would also eliminate the manufacturing business and occupation tax, eliminate the capital gains income tax that went into effect this year, and eliminate the WA Cares program and tax. The House last week voted to delay implementing WA Cares for 18 months.

Sponsored by Sen. Lynda Wilson, R-Vancouver, the bill has bipartisan sponsors as well.

“It’s great to see bipartisan recognition that now is the time for major tax relief, in one form or another,” Sen. Wilson said in a press release. “We welcome this proposal and look forward to having serious discussions about how to best let families and employers keep more of their own money. That would be a refreshing contrast to the past few sessions, when the majority was choosing instead how to take billions more from families and employers, even though there was no budget deficit to address.”

SB 5897, suspending the state’s portion of the gas tax for the rest of the year, is sponsored by Sen. Simon Sefzik, R-Ferndale, the state senate’s newest and youngest – at 22 – member. He was appointed to represent the 42nd Legislative District on Jan. 11 to fill the seat of his predecessor, Sen. Doug Erickson, R-Ferndale, who passed away from COVID-19 on Dec. 17, 2021.

“The state has so much money right now that the Legislature probably would have trouble spending it all,” Sen. Sefzik said in a press release. “Well, I’m saying we shouldn’t. We should give some of it back to the taxpayers, in the form of lower gas prices, at a time when it could really make a difference.”

The bill, if enacted, is estimated to save drivers $1.3 billion.

According to the state’s November revenue forecast, total state revenues are expected to grow 13.4% between the 2019-21 and 2021-23 biennial periods and 6.3% between the 2021-23 and 2023-25 ​​biennial periods. Revenues for the current budget cycle are now projected to be $60.2 billion, with projected revenues for the next two-year budget cycle at about $64 billion.

Despite Washington state’s solid financial situation, Gov. Jay Inslee has repeatedly indicated he is against any sort of broad-based tax relief.

“Well, it’s a simple fact that the need for expenditures will go on, but the revenues are going to go away,” Gov. Inslee said during last month’s unveiling of his proposed supplemental budget. “If those who get stars in their eyes and think that this revenue is continuing to come pouring in is totally unrealistic.”

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