Effort to oppose Section 2002(e) of HB 3191
Oppose Section 2002(e) of HB 3191 –
B&O tax increase affecting design firms
- Bill Overview
The House released its version of the budget this week HB 3191 – (specifically Section 2002) which proposes the following:
"A temporary B&O surtax of 0.5 percent is imposed on the following service categories:
5. Management, scientific, and technical consulting services including, administrative management services, human resource consulting services, marketing consulting services, logistic consulting services, and environmental consulting services"
House Finance Committee Chair Ross Hunter agrees that A/E firms are not included, however the bill includes environmental consulting and other activities typically performed by engineering firms.
ACTION NEEDED
CALL OR EMAIL BEFORE SATURDAY your state senators and representatives and tell them you are opposed to the business and occupation surtax imposed on selected business services in Section 2002 of HB 3191. Urge them to take out scientific, and technical consulting services and environmental consulting services from Sec. 2002
Please send a copy to bgarrity@acec-wa.org
Talking points - Please be specific in discussing your own story, the following points highlight issues with a B&O tax on services.
• Any increase in the B&O rate would be devastating for any design businesses reeling in the current recession. Since 2008, more than 4,200 design industry jobs have been lost in Washington and 33,100 jobs were lost in the entire construction industry in 2009. This proposal threatens the viability of many of these firms.
• The B&O is a gross receipts tax applied irrespective of profitability, which is particularly harmful in a down economy like the one we are currently experiencing.
• Studies have shown that previous B&O increases had a distinctly negative impact on the design professions – the 1993 increase caused a 9% drop in professional level employees in the following two years, according to a study conducted by Bellevue-based Hebert Research.
• Even if architectural and engineering services are not intended to be included in this new category of B&O taxpayers, it is difficult to separate the activities such as environmental consulting or scientific or technical work which are deeply integrated in the practice of engineering. This could result in all services of design consulting firms to be taxed at the higher rate and/or higher administrative costs when such separation is impractical or impossible.
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