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Saturday, May 27, 2023
May 27, 2023

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Washington Senate bill would exempt newspapers from B&O tax for 10 years


CENTRALIA — A bill being proposed in the state Senate, SB 5199, would allow digital and print newspapers to deduct all publishing-related activities from the Washington business and operation tax, commonly known as the B&O tax.

Currently, newspapers in the state see a 0.35 percent preferential B&O tax rate, which is set to expire in 2024. If the bill is passed, the new rate would go into effect on Jan. 1, 2024, and expire in 2034, while expanding the state’s definition of digital news content.

“The local news industry is having a very difficult time,” reads a staff report in the Senate bill report. “The rate will go up if the preference does expire next year, and we have to do something. Local journalism provides a unique and important role in our communities.”

With support from various lawmakers, the bipartisan bill was proposed at the request of Attorney General Bob Ferguson. During a media event at the Capitol earlier this month, Rowland Thompson, lobbyist for the Allied Daily Newspapers of Washington, presented the bill to news outlets.

The Joint Legislative Audit and Review Committee (JLARC), composed of an equal number of House and Senate Democrats and Republicans, studied the current B&O tax relief newspapers in the state previously enjoyed and, Thompson said, decided it was “not enough.”

A further deduction of the tax was then studied by the Citizens Tax Committee, he said, which came to the same conclusion.

“They’ve never had both of those agree that tax preference should be increased, actually,” Thompson said.

Likewise, language in the bill cites a study from Portland State University linking loss of available local journalism to a decline in civic engagement, a category that covered joining associations, contacting elected officials to express opinions and volunteer service.

While the sponsors of the bill currently are mostly Democrats, Senate Minority Leader John Braun, R-Centralia, said he expects the bill will see support from his caucus as well.

“Republicans support the First Amendment and believe a free press is critical to a healthy public discourse,” Braun said in a statement to The Chronicle. “We also know how lowering the cost of doing business helps to promote a strong private sector, and SB 5199 is about helping an important business sector to not only survive but be competitive as well. I would expect the solid Republican support we saw at the committee level to carry through in a full Senate vote.”

He added it’s “good to see Democrats get behind a tax exemption, as that doesn’t happen often enough,” and shared his hope they’d also back legislation to offer property-tax exemption and renters’ credit.

During the COVID-19 pandemic, without steady streams of advertising, many papers and publishing companies in Washington were forced to suspend print activities and go fully online to cut costs. While many have been able to reinstate print versions, the expanded definition of digital news from the proposed Senate bill adds safeguards for local journalism should printing activities cease.

Eligible digital content is defined as being published regularly and at least once every three months; having no more than 50 employees, at least one of whom creates content; primarily features written content; and is made available to readers primarily or exclusively in electronic format. Eligible digital content does not include content created by a radio or television broadcaster.

Otherwise, the criteria for newspapers remains as defined in a bill from 2008. Under the current law, a newspaper is a publication issued regularly at least twice a month, along with a few other qualifications.