Two bills related to city B&O taxes passed the Senate last week and will be forwarded to the Governor for signature.
2SHB 1059, which moves the due date for annual filers of B&O tax from January 31 to April 15, passed the Senate on April 11. SHB 1403, which implements changes to service income apportionment for city B&O taxes recommended by last year’s EHB 2005 task force, passed the Senate on April 12.
Cities with local B&O taxes are required to follow the state’s timelines for filing tax returns and would be impacted by 2SHB 1059’s change in state law. To help B&O cities prepare for the delay in annual filer revenues, the bill extends the deadline for cities to implement the change to returns for 2020 taxes filed in 2021.
SHB 1403 would replace the current test for apportioning service income based on physical contacts with customers to a hierarchy of factors based on more common business information. AWC appreciates all of the work and time of the city task force members, Joseph Cunha, Seattle; Danielle Larson, Tacoma; and Chris Bothwell, Lake Forest Park, over the 14-month task force process that led to these consensus recommendations.
The changes in these bills will also require an update to the city B&O tax model ordinance. AWC will be forming a task force to work on the city B&O tax model ordinance later this summer. If your city is interested in participating on the task force, please contact Sheila Gall.