Waive B&O tax liability for those businesses impacted by Governor’s emergency proclamation

Mar 18, 2020

While we hope it will only be for weeks, it is possible we could be looking at months of restrictions to fight the coronavirus pandemic. For those employers and employees most directly impacted by the Governor’s recent emergency proclamation (20-13 - Statewide Limits: Food and Beverage Services, Areas of Congregation), every available resource should be utilized to help them weather bearing the brunt of the social distancing policy being enforced for the public good. This should include immediate and retroactive waiving of all B&O tax liability during the period of the forced government restrictions on operations.

As such, Washington Policy Center recommends the following:

  • If the Governor has the legal authority, he should retroactively waive all B&O tax due dates, fees and penalties for those impacted by Proclamation 20-13, starting with March 1 and running for 30 days past the time he rescinds the restriction.
  • If/when a special session is called, the legislature should also retroactively and completely waive all B&O tax liability for those impacted by the proclamation, for the dates running from March 1 through 30 days past the time the restriction is rescinded by the Governor.

Those businesses directly impacted by Proclamation 20-13 include:

  1. Restaurants;
  2. Food courts;
  3. Bars;
  4. Taverns;
  5. Coffee shops;
  6. Caterers;
  7. Clubs;
  8. Bowling alleys;
  9. All other similar venues in which people congregate for the consumption of food or beverages;
  10. Theaters;
  11. Bowling alleys;
  12. Gyms;
  13. Fitness centers;
  14. Non-tribal card rooms;
  15. Barbershops and hair/nail salons;
  16. Tattoo parlors;
  17. Pool halls; and
  18. Other similar venues.

Other hospitality related businesses should also receive consideration for coronavirus emergency related tax relief. Lawmakers should also consider rolling back the B&O tax increase imposed this session on other employers.

By helping those businesses restricted from normal operations by government in order to slow the spread of the coronavirus, we will improve the likelihood that employees will actually have jobs to come back to when the emergency situation is over and help our economy recover faster.

Update Below (Posted 3/19 at 7:40 a.m.)

The Governor's tax actions yesterday afternoon are a good start. He waives the B&O penalties & fees for a limited time period but not the total liability for the tax owed. That said, totally waiving tax liability would require the legislature to act, which is why that should happen during special session.

The Governor could signal now his support for totally waiving the tax liability when the legislature next meets though so employers impacted by his Proclamation 20-13 know the B&O tax relief will eventually be coming.

Essentially the Governor did most of what we asked that is within his power. The time periods are more limited but it’s a good first step. Now we need him to say he supports the broader B&O tax relief so that the legislature knows he won’t be an obstacle if they try to enact it.

Additional Information
Tax Foundation: Taxes and Liquidity During an Economic Crisis