Get ready to pay new state taxes on beer, pop, bottled water, candy and gum.
According to the Everett Herald and the Seattle Times, Senate and House Democratic leaders have reached agreement on a menu of tax increases that would raise $801 million by mid-2011. As expected, a general sales tax increase is now off the table.
If legislative leaders can win simple majorities in favor of the package or something close to it by Tuesday night, they can fulfill their constitutional mandate to balance the budget — and go home.
House Democrats reported details of the tax package via Twitter and posted them on their blog, but pulled the details from their blog at midday Thursday, saying the tax package remains a work in progress.
The specifics could change, but here’s the list Olympia reporters obtained, together with an estimate of how much money each tax or revenue proposal would raise:
Three-year increase in the Business and Occupation tax levied on gross receipts of professional services businesses (from 1.5 percent to 1.8 percent): $245.9 million.
Three-year increase in the sales tax on beer, excluding microbrews, of 50 cents per gallon: $57.8 million.
Three-year excise tax on soda of 2 cents per 12-ounce container: $38.10 million.
End a tax exemption enjoyed by certain out-of-state companies that sell their products using in-state sales representatives (the Dot Foods case): $154.7 million.
Tax increase on tobacco products: $101.4 million.
“Business nexus” changes (changes in law that determine whether a business or individual is subject to the B&O tax): $82.4 million.
Sales tax on bottled water: $35.3 million.
Sales tax on candy and gum: $29 million.
Revenue from a new state lottery marketing proposal: $15 million.
Savings from operation of convention center: $10 million.
Increased tax collections due to clarifying Department of Revenue’s ability to go after companies that avoid paying taxes by finding loopholes: $8.2 million.
B&O tax on property management businesses: $6.9 million
Everett Herald reporter Jerry Cornfield reported that House Speaker Frank Chopp and Senate Majority Leader Lisa Brown met with Gov. Chris Gregoire late Wednesday afternoon and were polling their members late Wednesday to find out if they have the votes to pass the package.
The Legislature’s 30-day special session expires Tuesday. Gregoire has said she won’t call another but instead will cut the budget herself if lawmakers have not reached an agreement by that deadline.
The conservative Washington Policy Center questioned whether Democrats will give the public and the minority Republican Party a chance to weigh in on the proposed new taxes, at least two of which (the beer and soda taxes) have not been subject to a public hearing.
“It should be subject to debate, or at least the Democrats should let each party offer amendments,” said policy director Jason Mercier.
Meanwhile, the Washington Beverage Association is wasting no time attacking the proposed tax on soda. A new full-page ad, paid for by Washingtonians Against the Beverage Tax, appeared in newspapers around the state, including The Columbian, Thursday morning.
“This tax will severely impact our state’s bottling industry by causing massive family-wage job losses and forcing many bottlers out of business,” said Tim Martin, the association’s president and owner of an Elma bottling company.
