Regarding the article concerning the city of Kent’s implementation of an additional B&O tax, the complaint of Brenda Campbell, the controller of Poulsbo RV, are well founded.
As a retired accountant, I sympathize with her. However, one should look at the B&O Tax in general, an “invisible tax” that must be paid (at varying “risk” rates, depending upon lobbying capabilities) by all businesses to the city, county and state, all based on the gross revenues of the business (with certain deductions), without regard to whether they are even making a profit.
For some new and marginal businesses struggling to stay afloat, this can mean the difference between staying open and closing up shop. At least with the sales tax (although incredibly regressive and filled with exemptions and deductions for other mischief), it is collected at the source (the customer), typically as an addition to the sales price of the item(s) purchased.
The “invisible” B&O tax is not included in the price of the goods sold and thus must be born by the business from their gross revenues, before anything else is paid, such as wholesale goods, supplies, salaries, rent, utilities, etc. If there is any profit left over, great; if not, too bad, since you must “pay the city (county, state)” first or risk having your business license revoked and/or bank accounts attached.
It is and has been obvious for decades that a flat tax (including individual income) paid to the state, based on net income, and doled out to the various jurisdictions (based on pro-rata need) is the only obvious answer to this dilemma, but then each city would not be able to have their own little “fiefdom” with continuously overlapping employees (such as auditors!) and services, thus operating at the maximum model of inefficiency.
Get rid of the sales tax and B&O tax, period.
– Lorin Grinolds
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