Washington - Small Business Friendly? (Bellevue, Olympia: sales, lease, home)

[mc0624]

Hi,

I wanted to ask a general question of sorts......is Washington small business friendly?

We are from CA and entertaining the idea of moving to either OR or WA (more leaning toward WA). My husband and I both have small businesses. CA is the farthest thing from small (or any) business friendly and we are ready for a change. I know we have alot of investigating and visits to make. We are heading up in June for the first of several trips to take a look around.

Thanks for whatever insight you can offer

[BayAreaHillbilly]

Well as you already know there is no state income tax in WA.

Obviously that is not one and the same as the overall regulatory environment. However I would imagine it to be a key indicator.

My impression (as someone in Nor Cal contemplating a late career / retirement relo) is that WA is a pro small business, moderately supportive of big business, somewhat real property adverse state - at least in terms of policy.

[StealthRabbit]

Originally Posted by mc0624

Hi,

I wanted to ask a general question of sorts......is Washington small business friendly?

.

NO, WA is not SB friendly (but, maybe more so than CA)
do some homework:
http://www.city-data.com/forum/28994517-post2.html

ID is the choice for many of my SB clients needing to get out from under WA rules....

Basically, OR and WA are trying to be JUST like CA (and heading there FAST).

Really depends on your 'formula' . If you have High CAPITAL ASSET based business, you will get SOAKED for personal property tax (ANNUALLY for Paperclips, trash cans and everything else). If you lease equip and are a contract / consultant WA may be fine.

[Hemlock140]

I had a small business here for 16 years. The real problem is the B & O tax, which is based on gross sales, regardless of whether you made any profit that month. Also, some cities have a "head tax" on employees. Most cities have fairly strict sign ordinances, requiring permits with fees even for window lettering, and must approve the design and even colors. In Bellevue where I was, for example, total signage could not exceed 10% of the front facade, and windows were deducted from the square footage available in the calculation. They also did not allow a-boards except for limited events, and those also needed a permit. If you own equipment and furniture, it's taxed as property, and if you have inventory that is taxed.

[ukiyo-e]

Originally Posted by StealthRabbit

If you lease equip and are a contract / consultant WA may be fine.

This. I do contract scientific writing and editing from home and WA is perfect for me. (I moved here from CA several years ago.) Otherwise, what Stealth said in the rest of his post.

[509]

Originally Posted by BayAreaHillbilly

Well as you already know there is no state income tax in WA.

Obviously that is not one and the same as the overall regulatory environment. However I would imagine it to be a key indicator.

My impression (as someone in Nor Cal contemplating a late career / retirement relo) is that WA is a pro small business, moderately supportive of big business, somewhat real property adverse state - at least in terms of policy.

Washington state is owned and operated by the Corporations.

Boeing pays ZERO state taxes and the complaint about unfair government tax practices filed by the Europeans focused on Washington State tax breaks. Weyerhauser and other large landowners basically do NOT pay property tax. The tax they pay is about 30 CENTS PER ACRE!! Similar tax breaks for MicroSoft and other companies.

Here is a brief summary.

http://www.eoionline.org/tax_reform/...sOne-Apr08.pdf

There is also a Washington Department of Revenue publication that shows companies like Boeing that get tax exemptions pay ONLY 3.5% of the B&O tax. Small business pays 80% of the B&O tax in Washington state.

Property taxes vary by location. Shop carefully for location. Just in the Wenatchee Valley, taxes are VERY HIGH in Cashmere, a little lower in Wenatchee, and almost dirt cheap in Leavenworth. These are driven by school levies. Oh, the best schools are in the following order: Leavenworth, Wenatchee and the worst in Cashmere.

That said. We moved from Idaho to Washington when I was working for wages and got a significant boost in income since Washington does not have an income tax, a sales tax on food, and most services. So since we live a simple lifestyle without much consumption of "toys" it is a very cheap place for us to live.

I would check the B&O tax rates for your business. Remember they are based on GROSS SALES so no hiding income with deductions, etc. Then look at the trade-off between business and personal income.

To give you some indication of Corporate power in Washington state read this article:

Business Interests Trump Health Concerns in Fish Consumption Fight | InvestigateWest

Of course, in Washington state we always say "business-interests" when we really mean Boeing.

[wutitiz]

I'd say that WA has the same problems as CA, just probably not quite as bad. Voters keep voting for anything with that magic 'D' next to the name. Note that also, there is a high sales tax here (about 10 percent) so depending on your business that could impact your ability to sell. Also we have one of the highest gas taxes, and are moving in the direction of more tolling via transponder.

In a way it could be a more potentially dangerous structure here for small bus. than California. First, we have no state income tax, and voters have rejected the idea enough times that it's likely dead for the foreseeable future. But that means that when the state wants revenue, they must look for other sources.

Second, the main counterweight here to tax hikes is a guy named Tim Eyman who runs initiatives (state ballot measures). But given that his approach is voter-dependent, most of his efforts are directed against taxes on individuals, not businesses. Eyman has never run an init to address the B&O tax, for example. Incidentally Microsoft and Boeing routinely oppose Eyman's initiatives probably because they see them as threat to their next tax break. Bottom line, if you're a small business owner here, you're sitting right in the crosshairs of Olympia.

[Mellowdude]

Originally Posted by Hemlock140

I had a small business here for 16 years. The real problem is the B & O tax, which is based on gross sales, regardless of whether you made any profit that month. Also, some cities have a "head tax" on employees. Most cities have fairly strict sign ordinances, requiring permits with fees even for window lettering, and must approve the design and even colors. In Bellevue where I was, for example, total signage could not exceed 10% of the front facade, and windows were deducted from the square footage available in the calculation. They also did not allow a-boards except for limited events, and those also needed a permit. If you own equipment and furniture, it's taxed as property, and if you have inventory that is taxed.

Yes, the B&O tax is one of the factors in the decisions of many small business owners, to relocate out of WA. Myself, included. Not business friendly, at all. Oregon, is not much better.

[mc0624]

I work out of my home as an Accountant; however hubby does metal fabrication and would need a shop. So it sound like it might be ok for me but not great for him.

We've been in CA all our life and really ready for a change. However, staying near the west coast is desirable. Guess that sorta limits us!

[509]

There are minimum threshold amounts before you pay B&O tax. Check with the Department of Revenue.

Just take the money out when you bill your customers....and remember your paying taxes so Boeing, Microsoft and other corporations do NOT have to pay taxes.

When your collecting taxes for the government....it was not your money to begin with.....and your are the tax collector with a small business in Washington state.