Washington State’s lack of a state capital gains income tax is a selling point for attracting businesses. The important attribute of our state’s tax system is often acknowledged as a “pro-business” attraction.
Indeed, the Washington State Department of Commerce’s “Choose Washington” website—a site which markets the state to businesses—emphasizes the lack of a state capital gains income tax as an attribute that grants businesses a “competitive advantage found in few other states.” At least, the website used to emphasis that fact.
Last month, the website stated the following:
“We offer businesses some competitive advantages found in few other states. These include no taxes on capital gains or personal or corporate income. We also offer industry-specific tax breaks to spur innovation and growth whenever possible.”
The website now states:
“We offer businesses some competitive advantages found in few other states. This includes no personal or corporate income tax. We also offer industry-specific tax breaks to spur innovation and growth whenever possible.
Notice, the website no longer lists a “capital gains tax” as among the “advantages.” The Washington Policy Center’s Jason Mercier asked Department of Commerce what gives. Here’s the reply he received:
“Currently there are multiple revenue proposals and tax preferences in play in the Legislature, including capital gains and R&D incentives, for example. You see a normal refresh of online marketing content to reflect that. We think it would be disingenuous not to adjust our marketing messages about tax policy and preferences accordingly.”
Choose Washington has listed our state’s lack of a capital gains income tax as an advantage since 2012. It seems a bit premature to remove it now.
It could be that the Department of Commerce should receive credit for truth in advertising. Or, it could be a bit of political pandering. In any case, as Mercier points out, “lawmakers still have the option to restore this “Pro-Business” selling point by rejecting capital gains taxes and help employers and individuals “Choose Washington.””