Small Business: Oregon or Washington? (Vancouver, Camas: sales, real estate, contractors)

[moving from CA]

My husband and I are relocating to the Northwest and are trying to choose between Oregon or Washington. He has a small business, an S Corp that we will be relocating as well.

Are there any tax or other benefits for the business in choosing between the two states? Any information would be helpful.

[StealthRabbit]

1) Spend some time on each state's Dept of Revenue and Licensing websites,
2) contact a business accountant that has clients in each state.
3) research potential sites
4) validate costs (taxes, licensing, regulations) for that specific location

from my limited observations...
need to look into EACH location as there are different taxes and rates for each local taxing district (within the specific counties).

WA is a bit rough on small businesses (use tax, personal property tax, B&O, also workman's comp and licensing and bonding from Dept of Labor and Industry) You may have to charge sales tax on your business activities, it really depends on specific activities. (most labor is sales taxable, but 'consulting' is not)

but... WA has no state income tax on earnings; so it may depend on how your earning is allocated (salary or business income, capital gains, capital asset gains...)

OR has some similar taxes + income tax, you really need to contact an accountant who does both states (very ez to find one in Vancouver). I haven't ever filed their Business taxes, as I limit my activities to only have salary income in OR, rather than business income.

Look into economic incentives also. Both Skamania and Cowlitz (adjacent to Clark) are 'distressed' and offer incentives and tax reductions to some businesses. From my info Multnomah County (most of downtown and east Portland) is VERY expensive to do business!! (it's those 'employee' voters, and generous politicians with significant agendas)

[ArcticPhoenix]

There's no State Income Tax in Washington State, nor is there any corporate income tax in Washington.

I'd pick Washington, but that's partially because I live in Washington.

[StealthRabbit]

some of the state imposed taxes on your business are indexed to your revenue (gross, not net) BE CAREFUL ! (I live in WA too, temporarily... ) Its great if you have income to enjoy tax free, you are an employee arther than an employer, and a renter; but if you are a retiree (fixed income) or a business and property owner, there are some hefty taxes. I think WA is now rated #6 highest for total tax burden. It really depends on your situation and location. $33/day for property taxes is too much for me. Oh, and don't forget the real estate excise tax that Christine gets as your 'going away' gift to her. (She's always got that cheesy (lawyer) smile, I would too if I was skin'n the fat cat)

Good luck, be smart

[lilypad]

Originally Posted by janb

some of the state imposed taxes on your business are indexed to your revenue (gross, not net) BE CAREFUL ! (I live in WA too, temporarily... ) Its great if you have income to enjoy tax free, you are an employee arther than an employer, and a renter; but if you are a retiree (fixed income) or a business and property owner, there are some hefty taxes. I think WA is now rated #6 highest for total tax burden. It really depends on your situation and location. $33/day for property taxes is too much for me. Oh, and don't forget the real estate excise tax that Christine gets as your 'going away' gift to her. (She's always got that cheesy (lawyer) smile, I would too if I was skin'n the fat cat)

Good luck, be smart

Janb, is there a link to show "tax burden" by state? Am looking at PNW states mainly. Thanks.

[Topaz]

I owned a small business in WA and the B&O tax is the killer tax because the tax is on GROSS revenue with no allowance for expenses. I especially disliked that as a business owner I paid tax on the business income and then my contractors paid B&O tax on the exact same income when I paid them.

Then again, Oregon's state income tax isn't much fun, either! My family had a double hit because we lived in Camas so my business was taxed by Washington and my husband's job was in Portland so we paid Oregon income tax as well.

No wonder we moved to Texas...