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Task force on local business tax & licensing simplification

During the 2016 legislative session, lawmakers passed HB 2959, establishing a task force to evaluate options to continue local business tax and licensing simplification. With approximately 225 cities issuing local business licenses and 43 cities imposing a B&O tax, the task force’s recommendations have the potential to impact nearly every city in the state.

More about the task force

AWC overview

Task force on local business tax & licensing simplification fact sheet

Task force recommendations

On December 30, 2016, the task force released its final report on local tax and licensing simplification.

The task force did not recommend that all cities with a business license be required to participate in the state’s Business Licensing Service nor did it recommend any centralized collection of city B&O tax at the state level. However, some of the items recommended represent a significant compromise on the part of cities. The four recommendations are:

  • Licensing: The state’s Business Licensing Service (BLS) will be the primary, but not exclusive, entry point for businesses to obtain general business licenses.
  • Local business licensing nexus: Cities, with input from business associations, will develop and adopt a mandatory model definition of engaging in business that includes a de minimis standard or occasional sales exemption.
  • Allocation and apportionment of service income: A work group of cities with a B&O tax and businesses will be formed to draft changes to the apportionment of service income under RCW 35.102.130.
  • Data sharing: The task force recommends the Legislature appropriate funding for an independent feasibility study to be conducted that will evaluate ways to create a more seamless and simplified experience for businesses to apply for a business license between BLS and the city tax and licensing portal, FileLocal.

The full report is available here.

AWC Legislative Bulletin updates

Materials from previous meetings

Friday May 27, 2016

Thursday June 30, 2016

Tuesday July 19, 2016

Online tax & licensing portals

FileLocal A city created online portal where businesses can get local licenses and pay local B&O taxes all in one place. Demonstrations and training available here.

Washington State Business Licensing Service (BLS) Upgraded in June 2016, businesses can apply for licenses from participating cities when they apply for their state business license. Learn more about the new system here.

AWC contacts

If you have questions or would like additional information, please contact AWC’s Peter King, Victoria Lincoln or Serena Dolly.