The following editorial originally appeared in The Seattle Times:
Many things are needed to sustain local news outlets in Washington.
That includes extending and expanding a business and occupation tax break the Legislature created to save jobs in the essential local news industry.
This is straightforward, relatively low cost and has strong public support, as evidenced by public comments last week in Olympia and earlier hearings.
Legislators should get this done, by approving a timely proposal by Washington Attorney General Bob Ferguson, state Sen. Mark Mullet and state Rep. Gerry Pollet. In Senate Bill 5199 and House Bill 1206, they propose exempting publishers from the tax until 2035 and expanding this break to digital-only news sites.
“Newspapers are vital to a healthy democracy and we have seen too many close and lay off employees,” Pollet said in a joint announcement. “We can and should do everything we can to help preserve newsrooms across the state.”
The state provided a B&O tax preference to publishers starting in 2009. Publishers now pay 0.35 percent of gross receipts, instead of 0.484 percent, saving the industry about $400,000 this year.
Expanding this preference was expected to cost around $1 million a year. A preliminary fiscal note suggested it could be more than double that amount. This should be clarified soon to continue the strong, bipartisan support for this important measure.
Regardless, this remains a relatively small break, one of hundreds of state tax preferences worth tens of billions of dollars. Yet it’s expiring next year, just as the local news industry braces for possible further layoffs and cutbacks.
If legislators don’t extend the preference, they will be effectively raising taxes on publishers at a life-or-death moment for their business, Mullet noted last week during the bill’s first Senate hearing.
“We’re in a time of transition,” Scott Hunter, publisher of The Star newspaper in Grand Coulee, testified. “It doesn’t make sense to impose a tax on an industry that is struggling, is essential, and it needs to transition.”
Hunter is the only reporter left at his paper, serving about 5,000 residents in five towns, and he’s not taking a salary. He testified before covering the Elmer City town council, after covering the Coulee Dam town council the night before.
“Every dollar matters. The B&O tax exemption is important for that reason,” Methow Valley News Publisher Don Nelson said. “But I think, more importantly, it benefits our readers and therefore your constituents. They rely on our papers for a lot of reasons, mostly for community connections.”
As of 2020, the state was providing 748 tax exemptions that saved taxpayers an estimated $35 billion, according to a Department of Revenue report.
While publishers account for a small fraction of this program, their tax preference is needed to sustain the service they provide to state residents.