Passed important Unemployment Insurance reform legislation Washington state
Perhaps the biggest success of the 2009 session was the passage of Substitute Senate Bill 5963, the UI conformity bill. This bill was necessary to bring our UI system back into conformity with federal law, maintaining over $300 million in federal tax credits for Washington employers. It also included modest tax relief for employers at every rate class in exchange for going back to two-quarter averaging (charging employers for an employee’s two highest earning quarters instead of four). These changes would also prevent overcharging employers and stop excessive reserves from building up in the UI trust fund.
Defeated big labor’s “Employer Gag Rule” legislation in Washington state
Perhaps the biggest assault on the rights of small business owners this session was the so called “Workplace Privacy Act,” more accurately called the employer gag rule. Lawmakers introduced Substitute House Bill 1528 and Substitute Senate Bill 5446, which would have prohibited employers from holding mandatory meetings or sending employee communications about religious or political issues. Never mind that state and federal laws already protect workers from these issues, or that the state’s own attorney general clearly stated that these bills were unconstitutional. In reality, the thrust of this legislation was to prohibit employers from talking to their employees about union issues and tie an employer’s hands during a unionization drive.
Won a waiver for first-time paperwork violations in Washington state
We joined with state Senator Derek Kilmer (D-Gig Harbor) to pass Substitute Senate Bill 5042, which gives small business owners a waiver of fines for first-time paperwork violations. Oftentimes, there are so many rules affecting a small business owner’s shop that they may not find out about a particular rule or regulation until they’re fined for breaking it. SSB 5042 sends a strong message to small business owners that the state recognizes the importance of small businesses in our economy and we want to encourage them – not punish them – for minor mistakes.
Successfully fought back against numerous attempts to raise Washington state taxes
With the state facing a $9 billion budget shortfall, it’s hard to believe we were able to escape this legislative session without a significant tax increase being referred to the voters for approval. However, it wasn’t for lack of trying; lawmakers proposed an increase in the sales tax to pay for state health programs, as well as a new income tax on individuals making over $250,000 per year. Fortunately, neither proposal garnered enough support to move forward this session.
Secured a Washington state "safe harbor" for the new destination-based sales tax
One of the most difficult adjustments for small business owners has been complying with the state’s new destination-based sales and use tax. The new law went into effect last July, and it requires employers who ship products to other local jurisdictions to charge sales tax based on the product’s destination, rather than the business location. Small business owners are burdened the most with this change because they don’t have sophisticated accounting software or accounting departments to help comply with the new law. We were able to amend Substitute Senate Bill 5566 to include a safe-harbor provision that exempts businesses with gross incomes below $500,000 from interest and penalties on inadvertent errors made in a good faith effort to comply with the new law.
