New Business, Income Taxes Lurking in Olympia in 2020?
The City of Seattle, according to sources including The Washington Policy Center, legislators and others, is planning to pass a new tax in January 2021. It's called the Payroll Expense Tax, and a paragraph from it's information on the tax reads as follows:
"Effective January of 2021, the City of Seattle will impose a payroll expense tax on businesses operating in Seattle. The new payroll expense tax is based on a business’s annual Seattle payroll expense attributable to employee annual compensation of $150,000 or more in the current year. A business must have at least $7 million in Seattle payroll in the prior calendar year to be subject to the tax.”
Now, that deals with Seattle. However, there's lots of buzz and claims a statewide tax could be filed for during the legislative session (which starts January 11) which would be modeled after this one.
The Washington Policy Center reports a Nov. 20 Bloomberg article discusses this statewide idea.
Although the election in November did not result in any sweeping Democratic victories or major seat gains in the legislature, many Olympia sources and GOP leaders say do not be surprised if a proposal for a state income tax is introduced; one that would possibly tax all residents and not just businesses via capital gains.