(The Center Square) – With the session winding down, the House Finance Committee on Tuesday advanced three tax bills out of executive session, giving them a do-pass recommendation.
Engrossed Substitute Senate Bill 5794 aims to eliminate certain tax preferences, address changes in constitutional law, and clarify legislative intent. It proposes to eliminate some tax incentives deemed “obsolete” by the tax preference performance review process, including those affecting transportation, storage, and processing of goods, and packing of agricultural products.
ESSB 5974 passed the Senate on Saturday.
Republicans offered several amendments to the bill ahead of final passage, including a modification suggested by Rep. Ed Orcutt, R-Kalama, to exempt credit unions.
“I think this exemption should be maintained,” he explained. “Most of the time, these credit unions are taking over because a bank is not doing well, and they’re doing it to make sure there is still a financial institution in some of these smaller communities.”
The amendment was not adopted.
Rep. Rob Chase, R-Liberty Lake, offered an amendment to exempt businesses that deal in precious metals.
“I think we need to keep the exemption of precious metals,” he said. “Most people that collect these are little guys. A lot of people during the Depression stuffed their mattresses with cash but soon found out it’s better to collect gold coins because gold and silver are like the canary in the coal mine.”
Rep. Alex Ramel, D-San Juan Islands, asked for a no vote on Chase’s amendment.
“Does this particular type of business merit special preferential treatment compared to other kinds of businesses that operate similarly?” she asked. “I think the answer is no.”
The amendment failed.
The committee next considered Engrossed Senate Substitute Bill 5813, which passed the Senate on Saturday.
The bill would increase funding for the Education Legacy Trust Account by making the capital gains tax and estate tax more progressive. It proposes a higher capital gains tax surcharge – 2.9% – for gains exceeding $1 million and an increase to the estate tax exclusion amount to $3 million.
The final bill considered on Tuesday was Engrossed Substitute Senate Bill 5814, which passed the Senate on Saturday.
The bill would update Washington’s tax code by extending sales and use taxes to specific services, increasing taxes on cigarettes, and expanding the tobacco tax to other products.
Two Democrats joined all Republicans on the committee in voting against the bill.
Following the hearing, Rep. Sharon Wylie, D-Vancouver, explained to The Center Square why she voted against the bill.
“It was the mishmash of things at the last minute and everything moving very quickly, and I’ve long believed that there are things exempt from excise tax that shouldn’t be,” she said. “But we have a gig economy now, and we have lots of contractors and people making ends meet in different ways, and just the brief time we had to look at it, there were more unintended consequences. I have faith in my leaders and in this committee that we’re going to try and get some of those wrinkles out, so it will be more fair and not have impacts on people it shouldn’t be impacting.”
Rep. Larry Springer, D-Kirkland, was the other Democrat who voted against the bill.
All three bills – critical for a revenue package as part of a budget that must be passed before the Legislature can adjourn – now go to the Rules Committee to be placed on the floor calendar for consideration by the full chamber.
The 105-day session is scheduled to conclude on Sunday, April 27.
