Washington Comment on Latest Small Business Optimism Index

September 9, 2025

Largest tax increase in state history taking effect next month

FOR IMMEDIATE RELEASE
Contact: Patrick Connor, Washington State Director, patrick.connor@nfib.org,
or Tony Malandra, Senior Media Manager, anthony.malandra@nfib.org

OLYMPIA, Wash., Sept. 9, 2025—From Patrick Connor, state director for NFIB in Washington, on release today of the latest NFIB Small Business Optimism Index showing a rise of 0.5 points in August to 100.8, nearly 3 points above the 52-year average of 98. Of the 10 Optimism Index components, four increased, four decreased, and two were unchanged. The increase in those expecting real sales to be higher contributed the most to the rise in the Optimism Index.

“While small business optimism is rebounding nationally, Washington state Main Street entrepreneurs are bracing themselves for the impact of the largest tax increase in state history, which takes effect next month. Several services will now be subject to sales tax, and Business & Occupation (B&O) tax hikes and surcharges will affect nearly every industry, so consumers may soon see prices at the register began to rise again. NFIB is calling on lawmakers in Olympia to work with us on meaningful adjustments to the Small Business Tax Credit to stave off some of the worst impacts of this tax package on our smallest local businesses.”

NFIB’s monthly Small Business Optimism Index is the gold standard measurement of America’s small business economy. Used by the Federal Reserve, Congressional leaders, administration officials, and state legislatures across the nation, it’s regarded as the bellwether on the health and welfare of the Main Street enterprises that employ half of all workers, generate more net new jobs than large corporations, and gave most of us the first start in our working life. The Optimism Index (aka Small Business Economic Trends report) is a national snapshot of NFIB-member, small-business owners not broken down by state. The typical NFIB member employs between one and nine people and reports gross sales of about $500,000 a year.     

From NFIB Chief Economist Bill Dunkelberg

“Optimism increased slightly in August with more owners reporting stronger sales expectations and improved earnings. While owners have cited an improvement in overall business health, labor quality remained the top issue on Main Street.”

Highlights from the Latest NFIB Small Business Optimism Index

In August, there was a notable improvement in overall business health. When asked to rate the overall health of their business, 14% reported excellent (up 1 point), and 54% reported it as good (up 2 points). Twenty-seven percent reported the health of their business as fair (down 4 points), and 4% reported poor (unchanged).
The percent of small business owners reporting labor quality as the single most important problem for their business remained at 21%, continuing to rank as the top problem.
In August, 32% (seasonally adjusted) of all owners reported job openings they could not fill in the current period, down 1 point from July. The last time unfilled job openings fell below 32% was in July 2020.
The net percent of owners raising average selling prices fell 3 points from July to a net 21% (seasonally adjusted), the lowest reading of this year.

Keep up with the latest Washington state small business news at www.nfib.com or on X @NFIB_WA or on Facebook @NFIB.WA