Introduction
The United States has a federalist system of government, in which sovereignty is divided between the national government and the governments of the various states. One of the areas in which states have broad (but not unlimited) authority to set their own rules and policies is taxation. Thus, although there are some similarities between the taxes imposed by the various U.S. states, there are quite a few differences as well.
The State of Washington relies on just a few types of taxes for the majority of state and local tax revenue. The business and occupation tax, sales/use tax, and property tax together make up roughly 85 percent of tax revenue at the state level. The property tax provides a majority of tax revenue for local governments such as counties and cities. This chapter will discuss how each of these taxes typically impacts businesses in the state, and will briefly address how other states’ taxes may affect businesses that also have operations and customers in those jurisdictions.
The State of Washington relies on just a few types of taxes for the majority of state and local tax revenue. The business and occupation tax, sales/use tax, and property tax together make up roughly 85 percent of tax revenue at the state level. The property tax provides a majority of tax revenue for local governments such as counties and cities. This chapter will discuss how each of these taxes typically impacts businesses in the state, and will briefly address how other states’ taxes may affect businesses that also have operations and customers in those jurisdictions.