Wednesday, April 6, 2016

Washington's Taxes

This morning KUOW compared the tax systems in Washington (no income tax) and Oregon (no sales tax, no business & occupation tax).

And today's installment of The Economics Daily from the Bureau of Labor Statistics shows that Washington State and Oregon have, respectively, very low and very high concentrations of tax preparers.

Map showing concentrations of tax preparers by state, 2015
Source: Bureau of Labor Statistics

Coincidence? I doubt it.

Curious about Washington's lack of an income tax? KUOW offers some Depression-Era history: The Strange, Short Story of Washington State's Income Tax, Oct. 18, 2015. KUOW is more than just radio: you can listen to the story, read the transcript, or watch an animated short.

In 2010, Washington State voters rejected an initiative that would have imposed an income tax on those with adjusted gross income over $200,000 (individuals) or $400,000 (joint-filers). One of the leading proponents was our building's namesake, William H. Gates, Sr.

Would an income tax be legal under the Washington State constitution? Read Prof. Spitzer's analysis in A Washington State Income Tax—Again?, 16 U. Puget Sound L. Rev. 515 (1993)

You can research states' taxes using Checkpoint, a tax research system in the Selected Databases list on our homepage. Choose State & Local in the pull-down menu for Practice Area:

screen snip of Checkpoint menu

Select the states you want to research. Then select the tax types (e.g., Business & Occupation Tax; Sales & Use Taxes). And finally, select the document types (e.g., statutes, explanations, annotations).

BNA (also available in Selected Databases) provides extensive information about state taxes. In the Tax and Accounting Center, select the State tab. Then you'll see Practice Tools, Expert Analysis, Source Documents, and more. To compare two or more states, use the "Chart Builder." For example, I compared income tax provisions in California, Oregon, and Washington:

chart from Bloomberg BNA

(Washington's income tax is easy to summarize: "Not applicable.")

Bloomberg Law (owned by the same parent as BNA) also has chart builders in its Tax Practice Center—with many more options. From either BNA or Bloomberg Law, you can export the chart to an Excel spreadsheet. If you're just getting started with state tax law, consider State and Local Taxation and Finance in a Nutshell (3d ed. 2007). For depth, use the State Tax Portfolios, available via the BNA platform or Bloomberg Law.

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