Two bills HB 2005 and SB 5777 were introduced in the last week that reflect several recommendations of the 2016 task force on local business tax and licensing simplification final report. Both bills implement the recommendations to increase the number of cities in the state’s Business Licensing Service (BLS), and include requiring cities to develop and implement a licensing threshold. The bills also create a work group of cities with a B&O tax and businesses to draft changes to the apportionment of service income under RCW 35.102.130.

HB 2005 is scheduled for public hearing at 3:30 pm on Tuesday, February 14 in the House Finance Committee. SB 5777 is scheduled for a hearing the next day at 1:30 on Wednesday, February 15 in the Senate Commerce, Labor & Sports Committee.

Cities participating on the task force have been supportive of the recommendations and appreciate that HB 2005 implements a number of them. We have some concerns with provisions mandating participation in BLS, prohibiting additional cities to join FileLocal for licensing after July 1, 2017, and lack of partnership in BLS administration of local licenses. SB 5777 includes a different approach to requiring cities to administer their licenses through BLS, including additional flexibility for cities to determine when joining BLS would cause hardship and allowing cities to choose to participate in FileLocal. Panels of cities will testify at both hearings to share these comments and we look forward to working with bill sponsors to ensure legislation moves forward.

More information about the task force is available here.