Tuesday, June 28, 2022
June 28, 2022

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Businesses express concerns over Vancouver’s tax plan

Group opposes the reinstation of a B&O tax in letter to council

By , Columbian staff writer
Published:

In a letter to Vancouver city government, a coalition of local business leaders expressed support for the spirit behind an overarching proposal of new taxes and services called A Stronger Vancouver.

But the letter also expressed trepidation about taxes and fees that could hit some businesses harder than others, and unequivocal opposition to reinstating a local business and occupation tax.

“Certain businesses have signaled their concern for facing as many as 5-6 different tax increases if the Stronger Vancouver package advanced exactly as it was last shared at the final executive sponsors meeting,” the letter stated.

Presented to the council earlier this month after two years of research and outreach, A Stronger Vancouver would stabilize the city’s budget for at least a decade. It would also pour resources into economic development, public safety and city parks.

But it comes at a substantial price tag: to fund the plan the city would need to collect an additional $30.1 million annually in taxes and fees, increasing its operating budget by about 5 percent.

In the letter, the group — a cross-section of leaders from the Greater Vancouver Chamber of Commerce, Identity Clark County, Vancouver’s Downtown Association and others — vehemently opposed one $5.5 million cornerstone of the proposal.

Reinstating the business and occupation tax, or a B&O tax, would be “regressive, unfair, (and) anti-competitive,” the letter states.

“(It’s) especially inappropriate give our location next to the Portland metropolitan area which has neither gross revenue taxes nor sales taxes, and within Clark County where no other municipality applies a local B&O tax,” the group wrote.

The proposed B&O tax, which would have the city collect 55 cents per $1,000 of gross annual revenue from Vancouver’s businesses, was phased out in 2002.

Under A Stronger Vancouver’s recommendations, local businesses would also see a hike in their annual per-employee head tax, from $90 to $160, to raise an additional $4.2 million per year. Together, the two taxes create an undue burden, the letter argues.

“No municipalities double-tax their businesses by implementing both a B&O and a head tax. We cannot support such a highly negative anti-business signal when instead we should be actively broadening our economic tax base to attract more job-producing employers and encourage expansion among those operating here now.”

Partially positive

Aside from opposing the B&O proposal, the letter expressed support for much of the Stronger Vancouver plan.

“The process helps align everyone toward a shared vision for our community, with services and amenities that taxpayers are comfortable supporting,” the group wrote. “As fellow residents and consumers, business leaders want a vibrant community but must also have predictability with regard to tax structures and activities.”

They supported the proposal to lift the 1 percent property tax revenue cap, which would require voter approval: “Property taxes spread the load fairly and equitably across businesses and residents, and there is a proven administration and collection process already in place,” the letter states.

The group also expressed support for taxing internet sales, expected to bring in $3 million per year. They’re all for raising park impact fees ($2.6 million) paid by developers, though urged the city to phase the increase in over a few years.

But they implored the city council to shelve two of the minor proposals: a Downtown Improvement Area that would collect 42 cents per $1,000 of assessed value of downtown businesses ($700,000) and an admissions tax that would collect 5 percent of ticket sales ($500,000).

“These tools require extreme caution as they tend to target a small number of businesses,” the letter states, “and need to be developed in ways that are mutually beneficial and supported by the small numbers paying or collecting the tax.”

In an email, Mayor Anne McEnerny-Ogle stressed that A Stronger Vancouver is still in its early stages, and the city council has a long way to go in hammering out the details before any residents or businesses see new taxes or fees.

“Equally important as the specifics of the recommendation at this point is for interested parties to understand that it is just that — a recommendation,” McEnerny-Ogle wrote.

“The city council will use it as a starting place (granted a substantial one) for their robust and thorough deliberations before taking any action.”

A line-by-line breakdown of the Stronger Vancouver recommendations, including a calculator that helps businesses and households determine how much their taxes might increase under the plan, can be viewed at www.strongervancouver.org.

Columbian staff writer

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