GOP lawmakers calls for tax moratorium to revive economy

State lawmakers from Gig Harbor and Aberdeen have released a plan to temporarily suspend the state business-and-occupation tax as well as government impact fees to help the economy recover from the new coronavirus pandemic.

State Rep. Jesse Young, R-Gig Harbor, released the plan with a fellow GOP lawmaker Rep. Jim Walsh of Aberdeen.

“This plan will position our state economy well from a competitive standpoint, especially from foreign and out-of-state competition, increase capital liquidity and ultimately help regenerate our overall state revenue,” Young said in a written statement.

Young said the B&O tax provides about 18 percent of the state’s revenue, compared to about 50 percent for the sales and use tax.

A “pause” in collecting the B&O tax for the rest of the year would increase small business profit margins, Young said. By lowering the risk of failures when businesses reopen their doors, banks would be able to lend more money, he added.

The plan proposed by Young and Walsh also would temporarily suspend government permits needed to reopen businesses and impact statement assessments.

The two Republican lawmakers are working on a bill to try to put their plan into effect if Gov. Jay Inslee calls a special session to revise the operating budget in response to the pandemic. Young said he’s open to negotiating the length of the moratorium on the B&O tax and permits, depending on what happens to the state budget the rest of the year.

The proposal is among several changes in tax policy that GOP legislators have pushed as the state faces a potential massive reduction in revenue. Sen. Steve O’Ban, R-University Place, on April 20 urged Inslee to suspend car tab collection in excess of $30 — the amount that voters approved last November in Initiative 976.

At a press briefing Wednesday, Inslee was asked about providing car tab relief. He noted that the state Supreme Court had agreed to hear the legal challenge that has put I-976 on hold, but he said he “didn’t have any news on car tabs.”