State Rep. Chris Reykdal of Tumwater has introduced House Bill 2286 that will increase the business & occupation (B&O) tax credit 150% for small businesses by closing certain tax exemptions that primarily benefit large corporate farms.
“Mom and pop store owners are the heart of our economy and they need our help to stay competitive,” said Reykdal. “This bill will allow our small businesses to compete more fairly with the multi-national chains, and we can do it without hurting education funding.”
Currently, service businesses with gross receipts of up to $56,000 can get relief from the state’s B&O tax. HB 2286 will extend that gross receipts threshold to $140,000. For retailers, the relief threshold goes from $89,000 currently to $223,000 under the bill.
HB 2286 will eliminate the retail sales tax exemption for pesticides, herbicides, and fertilizers for farmers. The majority of this tax benefit goes to a handful of large corporate farms. Large farms that produce $1 million per year in gross sales make up 70% of all farming sales in Washington even though they make up just 3% of all farms according to USDA data.
“With HB 2286, we can shift this tax break from big corporate farms, whose profits often leave the state, to tax relief for small businesses whose sales and profits are almost 100% retained in state,” said Reykdal. “Incentivizing the use of chemicals on our food with a tax break is not good public policy. But shifting a fraction of our $9 billion per year in tax breaks to those who need it most, is good policy.”