City council to consider B&O tax

By Stefanie Donahue

Wholesale and manufacturing businesses that gross $20,000 or more per year may soon be asked to pay a 0.2 percent Business and Occupation (B&O) tax to help pay for city services.

Blaine City Council will decide whether or not to approve the B&O tax after two public hearings scheduled for 6 p.m. on Monday, February 11 and 25 at Blaine City Hall, located at 435 Martin Street, Suite 4000.

In Washington, a B&O tax can be levied at a maximum 0.2 percent on the gross receipts of wholesale, manufacturing, retail and service businesses. Gross receipts are the total annual revenue of a business, without subtracting costs and expenses.

Wholesale and manufacturing businesses – such as plants, factories and mills or businesses that arrange the purchase or sale of goods to retail establishments – are being targeted because they don’t pay a sales tax, but still utilize city services.

“The city has continued to see an increased demand for services and revenue is not keeping up,” according to a press release from the city. “Revenue to provide services is increasing at two percent per year, while costs independent of the city are four percent on average.”

City services are currently paid for through a 6 percent utility tax, 8.7 percent sales tax (of which the city retains 1.05 percent) and property tax.

An estimated 30 to 50 wholesale and manufacturing businesses in Blaine would have to pay the B&O tax starting this year if approved by Blaine City Council. Businesses that gross $500,000 annually would have to pay $1,000.

The B&O tax is expected to generate an estimated $200,000 per year and would be used to pay for additional police and administrative personnel, replacement of police vehicles, What-Comm 911 emergency dispatch services and public park and building maintenance.

The council will discuss the tax at a study session that begins at 5 p.m. on Monday, February 11 at Blaine City Hall. During the session, councilmembers cannot vote and the public cannot comment.

Read more about the B&O tax by visiting bit.ly/2D8SpKc.