As Gov. Jay Inslee took aim at Senate Republicans’ budget Tuesday, he zeroed in on one tax break he said illustrated the GOP’s misplaced priorities: an exemption for wood chips and cedar planks used to cook meat.
Inslee questioned why Republicans would include that in their new two-year spending plan, while simultaneously suggesting a cut to homelessness programs and putting less money toward schools than Inslee proposed in December.
“They do find money, interestingly though, for a tax break to help high-end restaurants write off the cost of flavorful, wood-smoked steaks,” Inslee, a Democrat, said of the GOP proposal.
“… In some sense, it’s hard to take this proposal seriously, when you reduce the education for early child education early in kids’ life, you don’t improve it significantly in the middle, and don’t improve their ability to have higher education, because you think tax cuts for highly flavored meals at high-end restaurants is a higher priority.”
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But the sales-tax break for “products that impart flavor to food during the cooking process” is one Inslee signed into law four years ago — and that two of Inslee’s fellow Democrats have proposed extending this year.
The tax break — which benefits restaurants that serve dishes such as cedar-plank grilled salmon, or mesquite-smoked chicken — is set to expire in July.
Originally, the measure was proposed in 2013 by lawmakers Rep. Larry Springer, D-Kirkland, and former Sen. Bruce Dammeier, R-Puyallup. It ended up in a larger bill containing several tax exemptions that year, which Inslee later signed into law.
At the time, the restaurateurs argued they shouldn’t be charged sales tax on wood and other items used to flavor food, just as they aren’t charged sales tax on the food itself.
Now, two members of Inslee’s party — state Rep. Kris Lytton, D-Anacortes, and state Sen. Kevin Ranker, D-Orcas Island — are sponsoring bills to extend the tax break through 2028.
Lytton is the chairwoman of the House Finance Committee, while Ranker is the lead budget negotiator for Senate Democrats.
Tara Lee, a spokeswoman for Inslee, said the governor’s office is aware Inslee signed the tax break for food-flavoring products into law four years ago.
She said the governor still thinks GOP leaders are focused on the wrong things in their budget, and including money for the tax break is one example of that.
“The governor’s main point in mentioning that was to show that these are indeed, misplaced priorities,” Lee wrote in an email. “Rather than focusing on education as they should be doing, the Senate budget focuses on a lot of other things, including tax breaks and including huge increases in property taxes.”
The Department of Revenue estimates extending the tax break for products that flavor food would cost the state about $150,000 in revenue every two years.
That’s only a fraction of what’s contained in the $43 billion spending plan Senate Republican leaders released Tuesday.
House Democrats are scheduled to release their budget proposal Monday, beginning what is expected to be weeks of negotiation.