It Only Took Six Days: First Casualty Of Washington State's Increased Business Tax

Democrats Hate Small Business

Tomy Foster and his wife, owners of Nerd Towing.

TAXING GROSS RECEIPTS OF BUSINESSES: House Bill 2081 increases the Business and Occupation (B&O) Tax which is assessed on gross revenue of a business. Even if a business makes a loss, a business still pays B&O taxes on all received revenue. THIS is insane and only has one purpose: to run small businesses out of business so that Big Business (Democrat donors) can take over the customers. The rate increase is dependent on the type and income of the business and ranges from 0.03% to 0.35%. The increase in B&O taxes will be passed on to the consumer in the form of higher prices for goods and services. Senate Bill 5814 is a massive sales tax expansion, adding sales taxes for the first time to many service-related activities.

Eight employees have already lost their jobs:

“NERD TOWING” SHRINKS FROM TEN EMPLOYEES TO TWO

Following is the notice the owner, Tomy Foster, posted on Facebook on May 27th:

“After much thought and reflection, I want to share a big update about the future of Nerd Towing aka Nerd Motorsports. To all our loyal customers, fellow business owners, and the good people of Tacoma:

Let’s clear the air: NO, Nerd Towing isn’t for sale anymore. This Nerd Isn’t packing up for sunnier states.

But we are making a big change: We’re scaling the business back to just the two of us, me and my wife, my partner in life and in business. My wife may not be out on the road, but she’s the backbone of this business, handling everything behind the scenes, keeping the wheels turning while I’m out doing what I do. None of this works without her.

Why? Because we’re tired, and not just the “we worked a long shift” tired. We’re talking deep, soul-draining, state paperwork, 10-employee-payroll, can’t-take-a-day-off tired. The Burnout! Tired of sending love letters to Olympia in the form of a check! Tired of watching my profits disappear faster than sunshine in December.

Running a business of this size in Washington has become not fun anymore. They make you feel like you work for the taxman himself. Every time we grew, the state took a bigger cut. Between IRS taxes, L&I, Dor, esd, insurance, and trying to keep everyone else paid, we realized one harsh truth: we’re taking on all the risk and liability, and still being the lowest-paid in our own company. I mean I’m proud of what we built, but when the state says they are going up on the cost of everything they already take, enough is enough!

And while Tacoma has always had our back, the system? Not so much..

We considered selling. We considered shutting it down completely and becoming full-time Sasquatch hunters. But in the end, I remembered why I love Nerd Towing: I love what I do—I just don’t love the oversized tax bill, the sleepless nights, or the liability that comes with it. So in the end, we’ve decided to bring Nerd Towing back to its roots: one-man, one truck, doing what I love without the weight of overhead, taxes, payroll, and liability dragging it down.

I love this city. We built this in Tacoma, for Tacoma and we’re still here—just smarter, leaner, and finally taking a damn day off together once in a while. What this means moving forward: This means Nerd will continue networking with other trusted companies to help tackle the work load when needed.

Thanks for all the love and support over the years. This isn’t the end of Nerd Towing it’s just the beginning of the next chapter, This change will allow us to write our own pages in this book as we go! We have a lot of work to do.”

GREEDY DEMOCRATS INCREASE TAXES ON RESIDENTS & BUSINESSES

On May 21st Democrat Governor Ferguson signed the largest tax increase in history into Washington State law with the passage of the bi-annual budget (Senate Bill 5167) and several other bills that increase taxes for residents and businesses. Like most Democrat politicians, Ferguson was lying to the public on April Fools Day when he told the press he would be willing to compromise on taxes. On the same day, Ferguson told My Northwest, “We cannot adopt a budget with anywhere near the levels of taxes currently proposed by the House and Senate.” Yet, 50 days later he signed bills with the highest tax increases in the state’s history.

As Washington Policy Centers' report card for Washington's Future indicates, Washington is currently ranked 45th in the nation for its business tax climate.

The bills signed into law include,

• Senate Bill 5194 and 5195, relating to the capital budget and bonds

• Senate Bill 5161, 5801 and 5802, relating to the transportation budget

• House Bill 2077, relating to taxes on zero-emission vehicles

• House Bill 2081, relating to Business and Occupation tax increases

• Senate Bill 5813, relating to capital gains and estate tax increases

• Senate Bill 5814, adds sales to services

• Senate Bill 5794, relating to eliminating tax preferences

• Senate Bill 5167, the bi-annual budget.

Senate Bill 5161, the transportation budget, increases the gas tax by 6c per gallon on gas and 12c per gallon on diesel. This will drive up transportation and delivery costs for all products and services in Washington.

TAXING GROSS RECEIPTS OF BUSINESSES

House Bill 2081 increases the Business and Occupation (B&O) Tax which is assessed on gross revenue of a business. Even if a business makes a loss, a business still pays B&O taxes on all received revenue. EVEN IF A BUSINESS MAKES A LOSS!!!! The rate increase is dependent on the type and income of the business and ranges from 0.03% to 0.35%. The increase in B&O taxes will be passed on to the consumer in the form of higher prices for goods and services.

Senate Bill 5814 is a massive sales tax expansion, adding sales taxes for the first time to many service-related activities. As examples, IT services, custom website development, custom software, security services and advertising services will all now need to charge customers sales tax on every transaction.

Senate Bill 5794 repeals and revises several tax preferences. The Governor vetoed the removal of the tax preferences for community banks. It adds a new B&O (gross) tax on storage units up to 1.75%. The increase in B&O taxes and the removal of the tax preferences will be passed on to the consumer in the form of higher prices for goods and services.

Senate Bill 5813 increases the capital gains on long term capital assets sold valued at over $1 million from 7% to 9.9%. This adds a significant cost to selling an investment or other capital asset valued at over $1 million. For larger estates of $9 million and up, the estate tax rate is increasing from 20% to 35%.

Overall, the budget (Senate Bill 5167), totaling approximately $77.8 billion in appropriations, reflects a 6.5% increase over the $71.9 billion for the last biennium (2023-25), and a $9.3 billion increase in spending over the next four years, far outpacing inflation and population growth.

Taxpayers, already grappling with high costs of living, deserve a budget that maximizes value through competition, innovation, and accountability and not massive tax increases.