Wednesday, March 8 was the 59th day of the Legislative session, which will last a total of 105 days this year. It was also considered the midway point of session, when non-budget bills needed to pass the chamber they originated in, either the House of Representatives or Senate.
During the session so far, many issues have been debated and voted out of each chamber. From gun safety, police reforms, education changes, and more. Most of the issues we at the WSCPA are watching have fiscal impacts to the state and so are not subject to the current cutoff dates.
The legislature considers any bill that is “Necessary to Implement the Budget” immune to cutoff dates, and they can, therefore, be introduced or voted on at any time.
Two bills we have watched closely for their impact to many CPAs and the businesses or individuals they serve are a replacement of the B&O tax with a margin tax (HB 1644/SB 5482) and a potential wealth tax (HB 1473/SB 5486). The margin tax has been recognized by legislators as needing a lot of work to clarify and clean up policy issues within the current proposal. While it appears to not be moving forward right now, there have been discussions of working to update the bill during the interim in advance of the 2024 legislative session. The wealth tax, because it would be a new type of tax, also has many administrative challenges.
Another bill that several firms have raised concerns with is SB 5059, which would change when interest starts being calculated for legal claims. Currently, interest starts accruing at the time a judgement is granted in court. This new proposal would have the interest start accruing from the time the original damage occurred. Many school districts, hospitals, and nonprofits have raised concerns with the Legislature about this proposal which could arguably disincentivize speedy settlements.
The legislature will continue to consider bills for about another month. A new two-year budget for the state will be proposed in the next few weeks where the state is expecting about a two percent growth in tax revenues compared to their last budget. Since that is less revenue than they were previously expecting, they will likely be looking at additional taxes to cover the gap. The budget and all other legislation will need to be passed by April 23 when the session is scheduled to conclude.
Mike Nelson is the WSCPA Manager of Government Affairs. You can contact Mike here.