SB 6176: State & local tx & licensing

Summary

• A new harmonized model ordinance for city business and occupation (B&O) taxes is established. Cities imposing a B&O tax must adopt either the existing Association of Washington Cities (AWC) model ordinance or the new harmonized model ordinance. The harmonized model ordinance is adopted in rule by the Department of Revenue (DOR), in consultation with an Advisory Committee. Cities that adopt the harmonized B&O tax must comply with all provisions of the model ordinance. Further, cities that adopt the harmonized B&O tax must agree in their local ordinances to follow and apply any official public guidance and interpretation issued by DOR.
• DOR may offer priority to cities in compliance with the harmonized city B&O tax over other cities in the state licensing system administered by DOR under chapter 19.02 RCW; technical advice and data requests for city B&O tax matters; the provision of audit, enforcement, and tax discovery assistance for city B&O taxes; taxpayer assistance in the form of information, education, and instruction concerning a city's B&O tax; and assistance related to the city's B&O tax as DOR deems appropriate.
• The harmonized city B&O tax requires that a city may not impose a B&O tax on a person unless that person has a nexus with the city. The harmonized city B&O provides credits to avoid multiple taxation. Further, any city that imposes a harmonized B&O tax must provide for the apportionment and allocation of gross income.
• The state B&O tax code is amended by replacing reduced B&O tax rates with deductions and consolidating B&O tax classifications.

From the Senate Bill Report (Orig.) (SB 6176), written by the Legislature's nonpartisan staff. Read the full report ↗