City business licenses and B&O taxes

On Friday, December 4, the House Finance Committee held a work session that included a discussion of "nexus" to trigger the requirement that a business be licensed or pay local business and occupation (B&O) taxes in a city. The hearing also included a discussion of a proposal expected to be advanced by the business community next session similar to HB 2965 from the 2008 session that would mandate that the Department of Revenue study the feasibility for centralized state collection and administration of local B&O taxes. Thanks to Seattle finance director, Dwight Dively, for presenting at the session.

Also discussed in the work session were model letters AWC worked cooperatively with the business community to develop for cities to use when inquiring about the need for a business license. Those letters include a reference to the provisions of SHB 3126 which passed in the 2008 session clarifying that a business could not be subject to a business license solely due to compliance with the streamlined sales tax agreement.

AWC continues to encourage cities to use some version of our letters when checking with businesses on the status of a business license or tax.

Public fund deposits

Credit unions may accept all types of public fund deposits (state, county, city or agency funds), and in fact do accept deposits from federal public agencies. However, state law prohibits cities and other local governments from depositing their funds in credit unions. Currently 20 other states—including Oregon, Idaho and California, currently allow public entities to deposit their funds in a credit union.

ESHB 1669, advanced last session, would remove this prohibition, and allow credit unions to apply to the State Treasurer to become qualified public depositaries under the same terms and conditions applicable to other financial institutions.

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