Governor Signs Bill Delaying WA Cares Payroll Tax

Date: January 29, 2022

Ergonomics legislation passes first committee

State Director Patrick Connor reports from Olympia on the small-business agenda for the legislative week ending January 28

The big news as Week 3 of the 2022 legislative session draws to a close is Gov. Jay Inslee’s signing of HB 1732, delaying the implementation of the WA Cares long-term services and supports program and the payroll tax that funds it. Employers who collected premiums from workers since January 1, 2022, must now refund those premiums.

Below is an overview of other items of interest to small business this week.

Small Business Day

NFIB held another successful Small Business Day, thanks to our terrific guest speaker, former state Rep. Mark Harmsworth.

Harmsworth is director of the Washington Policy Center’s small business center, a serial entrepreneur, and NFIB member.

Members asked questions on a variety of topics ranging from the governor’s riparian set-back bill to COVID vaccination logs to the state’s growing cannabis industry.

Participants also sent nearly 100 messages to state senators in the hours just before a final vote was taken on HB 1732, delaying implementation of the WA Cares program and its payroll tax.

This virtual event was free of charge thanks to our generous sponsors, Rock Point Oyster Co. and CA Logue Public Affairs.

B&O Tax Replacement Survey

Small-business owners have until January 31 to complete an important online survey that will inform the state Tax Structure Work Group’s efforts to finalize potential alternatives to the state’s dreaded Business & Occupations (B&O) Tax.

NFIB encourages small-business owners to complete this survey.

Please note, there are two versions. You should be able to complete the short survey in 10 minutes or less. The long version could take as much as 45 minutes, but most people complete it in about half an hour. Results from the long version will be most useful, but even completing the short form will be helpful.

Environment

While it is too early to celebrate, the governor’s salmon recovery proposal, which was discussed in last week’s update, appears to have stalled. The House version, HB 1838, has not been scheduled for executive action in the House agriculture committee. The Senate agriculture committee has so far declined to hold any hearing on the Senate companion, SB 5727. The deadline for committees to approve policy bills is next Thursday, February 3. NFIB opposes these bills.

Health Care

The House version of the balance billing bill, HB 1688, was approved by the House Health Care & Wellness Committee this week. It’s companion, SB 5618, was heard last Friday, but has not yet been scheduled for executive action in the Senate Health & Long-Term Care Committee. NFIB supports this legislation, which would harmonize existing state law with a new federal law that recently took effect.

Labor
  • HB 1837, Ergonomics The House labor committee approved the bill this week, sending it to the Rules Committee for further action. NFIB has issued an Action Alert so members can contact their state representatives, asking for a NO vote on the bill. The business community is united in opposition to this job-killing legislation.

  • SB 5130, Personnel files This bill is on the Senate second reading calendar, making it eligible for a floor vote at any time. NFIB does not object to the concept of making a copy of a worker’s personnel file available at no charge. However, the bill would not allow sensitive information to be redacted, and it would create a private right of action allowing workers to sue employers over alleged violations. L&I’s existing complaint system would provide a simpler, quicker means of resolving disputes over this issue. For these reasons, NFIB opposes the bill.

  • SB 5801 – Workers’ comp loser pays – NFIB testified before the Senate labor committee in opposition to this bill. Many small-business owners believe L&I’s workers compensation system is biased in favor of workers, and that bias extends to the reconsideration process and cases brought before the Board of Industrial Insurance Appeals. The only chance employers may have for a fair, impartial hearing is before a judge and jury. This bill would require employers to pay their opponents’ legal costs if the employer loses an appeal in court. This added financial burden would create a barrier to justice for small businesses that don’t have the ability to retain a lawyer on a contingency basis, like workers do, and that don’t have in-house counsel and the resources to hire a cadre of lawyers to take on the State, like larger businesses often do. Hence, NFIB opposes the bill.
Regulatory
  • HB 1810, Right to Repair The bill was heard in the House Appropriations Committee this week. The state Attorney General’s Office tagged the bill with a $3 million fiscal note, primarily to prosecute large technology manufacturers who refuse to comply with the bill if it is enacted. NFIB continues to support this bill, which would allow individuals and small repair shops greater ability to repair personal electronic devices like laptops, desktop computers, cell phones, and tablets.

  • SB 5533, Online marketplaces / organized retail theft – NFIB testified in opposition to this bill, which was heard in the Senate Energy, Environment & Technology Committee this week. The bill would require disclosure of personal information, like bank account numbers and tax documents, for small businesses and individuals meeting certain sales thresholds utilizing online marketplaces like Amazon, eBay, Etsy, etc. No reporting or other additional requirements would apply to the big box stores that are pushing this legislation. No additional resources or authority would be granted to law enforcement to prevent, detect, or prosecute thieves. Meanwhile, the House companion, HB 1614, is still in House Rules awaiting floor action. NFIB opposes both bills.

  • SB 5781, Increasing organized retail theft penalties, and SB 5944, Organized retail theft task force – While NFIB opposes adding reporting burdens and mandating disclosure of personally identifiable information on small-business owners, as HB 1614 and SB 5533 would do, we do support giving law enforcement the tools and resources needed to combat the growing scourge of organized retail theft. NFIB signed in supporting SB 5781 at the Senate Law & Justice Committee; the bill is scheduled for executive action on February 3. Unfortunately, SB 5944 has not been scheduled for hearing in that committee. There is a possibility that it could be addressed in the budget.
Tax & Fiscal
  • HB 1732 and 1733, WA Cares long-term care services and supports trust – As mentioned above, both bills have now passed the Legislature and been signed into law. These bills delay program implementation – and its payroll tax – by 18 months, and add more exemptions. Employers are no longer obligated to collect premiums from worker paychecks, at least not until 2023. If you did withhold WA Cares taxes from worker paychecks in January, you must now refund those deductions to your employees..

  • HB 1819 and HJR 4208, business personal property taxes – NFIB continues to work with Rep. Mari Leavitt and other proponents, county officials and their representatives, to reach agreement on a constitutional amendment and authorizing statute to expand the current personal property tax exemption to all businesses and increase it to $100,000. It has been challenging trying to determine the exact cost of this proposal, but we are working diligently to mitigate revenue losses the counties and junior taxing districts may incur, and minimize the potential tax shift from business personal property to real property. The package is scheduled for executive action on February 1.

  • HB 1957, small business disaster assistance – The House Appropriations Committee heard and approved HB 1957 this week. The bill would create an account at the state Department of Commerce to assist small businesses impacted by natural disasters or similar emergencies. There is no budget appropriation specified for this program yet, but we expect it to be included in the House budget proposal. NFIB supports the bill.

  • HB 2031 and SB 5873, UI and PFML tax relief – These bills would reduce the social tax component of unemployment insurance premiums and cap the social tax modifier for businesses with 10 or fewer employees. The bills would also delay the Paid Family and Medical Leave premium increase. Both tax increases took effect January 1, 2022. While HB 2031 was removed from the House labor committee’s hearing list Friday, its companion, SB 5873, is scheduled for executive action on January 31. NFIB testified in support of SB 5873 during Monday’s public hearing before the Senate Ways & Means Committee.

  • SB 5769, Senate Republican tax relief bill – NFIB expressed its concerns with Part 1 and 2 of the bill during testimony this week before the Senate Business, Financial Services & Trade Committee. NFIB supports Parts 3 and 4 of the bill. The bill has not been scheduled for executive action.
Prior Legislative Updates
Photo snip courtesy of TVW

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