Both city business license and tax proposals HB 2005 and SB 5777 were heard in their respective committees last week. Both bills implement the recommendations of the 2016 task force to increase the number of cities in the state’s Business Licensing Service (BLS) and include a requirement that cities 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.

Thanks to Paul Roberts, AWC Immediate Past President and Everett councilmember, and Glen Lee, Seattle Finance Director, for testifying with Peter King, AWC CEO in the House Finance Committee on HB 2005. The panel expressed support for implementation of the task force recommendations and shared some concerns regarding 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.

Thanks as well to Mayor Patty Lent, Bremerton, who testified with AWC the next day in support of SB 5777 in the Senate Commerce, Labor & Sports Committee. 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. SSB 5777 moved out of committee later that day, with the expectation that there will be further changes to the bill language when the bill moves to the floor in the next few weeks.

Finally, thanks to Patrick Connor, NFIB, who provided the small business perspective to cities on these proposals as part of a panel discussion at the City Action Days conference last week.

We remain hopeful that we can work with the bill sponsors and stakeholders on potential amendments to ensure legislation moves forward implementing the task force recommendations while preserving local authority.

A fact sheet outlining the main provisions of the bills is available here.