Tax preference review bill introduced

February 20, 2013

A bipartisan bill to ensure tax preferences identify legislative intent and have performance metrics was introduced today by Senators Tom, Billig, Hill, Hobbs and Murray. Here is the intent section for SB 5843:

The legislature finds that the tax code of Washington state includes tax preferences enacted to achieve a variety of policy goals for the public interest. To measure the effectiveness of a specific tax preference in meeting these goals, the legislature has adopted processes and accountability measures, including such requirements as a tax exemption study in RCW 43.06.400, review by the citizen commission for performance measurement of tax preferences in chapter 43.136 RCW, and taxpayer reporting in chapter 82.32 RCW. In order to make policy choices going forward regarding the best use of limited state resources, the legislature concludes that it is necessary to enact a set expiration date and to articulate the legislative intent for each tax preference.

The bill goes on to say:

For any bill introduced in either the house of representatives or the senate that adopts a new tax preference or expands or extends an existing tax preference, the bill must include legislative intent provisions, establishing the policy goals and any related metrics that might provide context and/or data for purposes of reviewing the preference under chapter 43.136 RCW. Any bill that is enacted without the legislative intent provisions required by subsection (1) of this section does not take effect. 

When testifying on various tax increase bills last week I encouraged the Senate Ways and Means Committee members to adopt a “Tax Preference Performance Statement” before allowing a bill that would create a new tax preference from moving forward.

Here is video of my testimony:

Additional Information
What to do about the state’s B&O tax and various preferences