​Join the Tri-City Regional Chamber of Commerce for an important Regional Advocacy Roundtable on Tuesday, July 1, 2025, at 8:00 a.m. at the Tri-City Business and Visitor Center. This event has passed. 

This timely discussion, titled "Behind the Bill – How Policy Shapes Our Energy Costs," will explore how recent legislation and public policy decisions influence the prices of electricity and fuel in Washington State. Business leaders, policymakers, and energy experts will break down what’s driving costs and what it means for local employers and residents.

The Tri-City Regional Chamber of Commerce has joined a broad coalition of business organizations urging Congress to preserve the federal deduction for state and local business taxes, commonly referred to as the B-SALT deduction. The Chamber is advocating for local businesses, emphasizing that changes to this long-standing tax provision could lead to substantial financial burdens for employers throughout the Tri-Cities and beyond.

The B-SALT deduction allows companies to deduct mandatory state and local taxes as part of their ordinary business expenses. However, recent proposals in Congress suggest placing caps on or eliminating this deduction entirely. If enacted, these changes could generate more than $600 billion in additional taxes over the next decade, affecting a wide range of business entities, including sole proprietors, partnerships, corporations, and commercial property owners.

In partnership with other regional and national business groups, the chamber highlighted that deduction has been a critical component of the federal tax code for decades. This helps ensure that businesses are not taxed twice on the same income and supports broader goals of economic stability and growth.

The coalition's message to lawmakers is clear: eliminating the B-SALT deduction would roll back important progress made through the 2017 Tax Cuts and Jobs Act, which contributed to wage increases, job creation, and expanded investment in local communities. Maintaining deductions is vital for preserving a fair and competitive tax environment that supports economic development and small business sustainability.
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The Tri-City Regional Chamber will continue advocating on behalf of its members to protect policies that promote business growth and reduce unnecessary tax burdens.

You can review the letter the Chamber sent here. 

Washington State’s 2025 legislative session brought major changes to the budget and tax landscape. The Washington Research Council (WRC) has published several insightful articles that break down the implications of these changes for businesses, consumers, and the state’s fiscal future. Below is a summary of each article, with a link for further reading.

1. Budget Cuts Offset by New Spending
While the Washington Legislature made $7.020 billion in cuts to the operating budget over five years, these reductions were largely offset by significant new spending on other programs. The analysis highlights that budget shifts do not necessarily reduce overall government spending but rather reallocate resources to new or expanded initiatives. This reflects a prioritization of funding rather than an actual contraction of government operations, raising questions about the long-term sustainability of the state’s fiscal policies.
Read the full article →

2. Historic Tax Increase and B&O Rate Changes
This Washington Research Council article outlines the scope and impact of the largest tax increase in Washington State’s history, adopted during the 2025 legislative session. The tax package includes substantial increases in Business and Occupation (B&O) tax rates, particularly targeting service industries and high-revenue firms. The Council details how different business sectors will be affected, emphasizing that changes could increase the cost of doing business across the state. This article also raises concerns about the economic impact of these tax hikes on competitiveness and investment in Washington.
Read the full article →

3. Revenue Impacts of B&O Tax Bill
A closer look at the revenue implications of the new B&O tax provisions reveals detailed estimates of the additional revenue the state expects to collect. It breaks down how each provision, including rate increases, surcharges, and new classifications, contributes to the overall projected revenue gain of over $2.7 billion in the first four years. The report emphasizes that a large share of revenue comes from service-related businesses and high-grossing firms, and it raises concerns about potential volatility and economic burden, especially for sectors sensitive to narrow margins.
Read the full article →

​4. Conference Budget Boosts Appropriations and Revenues
The final conference budget report proposes an 8.2% increase in Near General Fund–State (NGFO) appropriations and includes a tax package expected to raise $9.4 billion over four years. The analysis highlights how the budget significantly expands state spending, driven by both increased tax collection and program growth. The Council notes that the budget relies heavily on new taxes and fees, raising concerns about the long-term fiscal outlook and sustainability of this elevated spending trajectory.
Read the full article →

5. Impact of Higher B&O Taxes on Consumers
This article from the Washington Research Council explains that while a Business and Occupation (B&O) tax is levied on businesses, the economic burden often shifts to consumers through higher prices. The analysis emphasizes that businesses typically pass tax increases along the supply chain, especially in competitive markets where margins are tight. The Council warns that the recent B&O tax hikes adopted by the legislature are likely to raise the cost of goods and services for Washington residents, disproportionately affecting low- and middle-income households.
Read the full article →

Each article provides a valuable context for understanding how these fiscal decisions may ripple through Washington’s economy. Whether you’re a policymaker, business owner, or just a curious resident, staying informed on these developments is crucial.

In Washington State, the governor plays an important role in how the laws are enacted. After the state legislature, made up of the House of Representatives and the Senate, passes a bill, it does not automatically become a law. First, they must go to the governor. The governor has the power to approve or reject the bill. This power to say “no” is called a veto.

Let us take a closer look at the types of vetoes a Washington governor can use and how the legislature can respond if they disagree.

Three Types of Vetoes
1. Total Veto

• This is when the governor rejected the entire bill. If the governor believes that the entire bill is a bad idea or needs major changes, they can use the total veto. The bill will not become a law unless the legislature overrides the veto.

2. Partial Veto (also called Line-Item Veto)

• This is only allowed for budget bills and bills involving spending. The governor can cross out specific lines or parts of the bill, such as a single item or dollar amount, while still approving the remainder. This gives the governor more control over how much money is spent.

3. Section Veto

• In Washington, for non-budget bills, the governor can veto an entire section of a billif that section can stand alone and does not affect the rest. This is a way to fix one part of the law without rejecting everything.

Can the Legislature Override a Veto?
Yes, the Washington State Legislature has the power to override a veto—but it’s not easy.

To override any type of veto (total, partial, or section), both the House and Senate must vote again on the bill. This time, two-thirds of the vote was taken in each chamber. This means that two-thirds of all members must agree to pass the bill again, despite the governor’s objection.
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For example:

• In the House, with 98 members, at least 66 must vote yes.
• In the Senate, with 49 members, at least 33 must vote yes.
If both chambers reach the two-thirds mark, the veto is overridden and the bill becomes law without the governor’s approval.

Why Does the Veto Power Matter?

The veto provides the governor with a way to check the power of the legislature. It can stop laws that may not be fully considered or that might not serve the public well. However, the override process also gives the legislature a chance to stand firm if they strongly believe that law is needed.

This back-and-forth helps balance power between the branches of the state government. It encourages lawmakers and the governor to work together to find the best solutions for the people of Washington.

If you own a business in Washington State, there’s a good chance you’ve felt the sting of the Business & Occupation (B&O) tax. It’s a tax on your business’s gross receipts—not your profit—and it can really add up. But there’s been one big silver lining: you can usually deduct that tax on your federal return through something called B-SALT.

Now, federal lawmakers are thinking about taking that benefit away—or at least cutting it back. Here’s what you need to know about B-SALT, why it matters, and what changes are on the table in Washington, D.C.

What Is B-SALT?

B-SALT stands for Business State And Local Tax deductions. It's a federal rule that lets businesses deduct the state and local taxes they pay—like income taxes, gross receipts taxes (like Washington’s B&O tax), and property taxes—from their federal taxable income.

This deduction helps lower the amount of federal taxes businesses owe. Right now, there is no limit on how much businesses can deduct. This is different from the SALT cap for individuals, who can only deduct up to $10,000 in state and local taxes on their federal tax return.

For Washington businesses, B-SALT is especially helpful. Since Washington doesn’t have a personal or corporate income tax, businesses rely on the ability to deduct the B&O tax at the federal level to save money.

What’s Happening in Congress?

In 2025, Congress is looking closely at federal tax laws as part of a broader push for tax reform. And one target is the B-SALT deduction.

Lawmakers are considering a few major changes:
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   • Eliminating B-SALT deductions completely. Some proposals suggest that businesses should no longer be able to deduct state and local taxes at all. This would especially hurt businesses in states like Washington that rely on B&O and other local taxes.
   • Limiting deductions for certain types of businesses. Congress might let C-corporations keep the deduction but take it away—or limit it—for pass-through businesses like LLCs, S corporations, and partnerships. These are the types of businesses most small companies use.
   • Closing state workaround programs. Many states have created "Pass-Through Entity" tax programs to help small businesses get around the $10,000 SALT cap. Federal lawmakers are now thinking about shutting those programs down, which could indirectly reduce or eliminate B-SALT benefits for small business owners.

All of this is still being debated, but the direction is clear: federal tax writers are looking for ways to raise revenue, and the B-SALT deduction is a tempting place to start.

What This Means for Washington Businesses

If any of these federal changes pass, it could mean higher federal taxes for thousands of Washington businesses. Because the B&O tax hits nearly every business, losing the federal deduction would be a serious financial blow. For many small businesses that already operate on thin margins, this could mean less cash flow, reduced hiring, or even tough decisions about whether to expand—or shrink.

Even if you're not directly involved in policy or politics, these changes could affect your business in real dollars.

What Can Business Owners Do?

First, it’s important to stay informed. Congress is expected to keep debating these issues throughout the year, and the final outcome could look very different from today’s proposals.

Second, talk to your tax advisor. Understanding how these changes might affect your specific business structure—whether you’re an LLC, S corp, or C corp—is key to making smart financial plans.

Finally, if you want to have a voice in this process, consider contacting your congressional representatives or joining local business advocacy groups. Business owners across the country are already speaking up, and your story could help lawmakers understand what’s at stake.

The B-SALT deduction has quietly helped many Washington businesses lower their federal tax bills. But that might be about to change. With new proposals in Congress aiming to limit or eliminate this benefit, now is the time to get informed, talk to your tax advisor, and be ready for what’s next.

​A Simple Guide to the Washington State Legislative Process

In Washington State, legislative proposals may originate in either the House of Representatives or Senate. However, for a proposal to be enacted into law, it must receive approval from both the legislative chambers. This process can become complex, particularly when one chamber amends a proposal already passed by the other chamber.

The following outlines the process that occurs when a bill is amended in the second chamber, the subsequent response of the original chamber, and the procedures undertaken to reconcile these differences.

Step 1: Passage of a Bill in One Legislative Chamber 

Consider a scenario where a bill is introduced in the House of Representatives. It undergoes a series of committee hearings and debates culminating in a vote on the floor of the house. Upon successful passage, the bill is forwarded to the senate for further consideration.

Step 2: Modifications by the Second Chamber 

Upon reaching the Senate, the bill undergoes a comparable procedure: it is assigned to a committee for discussion and a potential amendment. Subsequently, it is presented to the full senate for a vote.  If the Senate approves the bill without alterations, it proceeds directly to the governor for ratification. 

Conversely, if the Senate incorporates amendments, the bill must be returned to the House of Representatives, the chamber of its origin, for further consideration.

Step 3: Review of Amendments by the Original Chamber

Following the modification of the bill, the original chamber, in this instance, the House, must determine whether to accept the amendments proposed by the Senate. The House is presented with two options:

• Concur (agree): Should the House concur with all the amendments introduced by the Senate, a vote to "concur" is cast. This concurrence signifies the acceptance of the revised bill, which is then deemed finalized and forwarded to the governor for signing.

• Do not concur (disagree): Conversely, if the House does not concur with the Senate's amendments, a vote to "not concur" is cast. In such a scenario, the bill cannot progress until both chambers reach agreement on the final version.

Step 4: Establishment of a Conference Committee

In instances where the originating chamber rejects amendments, a conference committee is typically required. This committee is a select group comprising members from both the House and the Senate tasked with reconciling the discrepancies between the two versions of the bill.

The conference committee convenes privately to negotiate and reach a compromise. Upon reaching an agreement, they draft a conference report that encapsulates the final version of the bill.

Step 5: Final Approval of the Compromise Bill

Subsequently, the conference report is submitted to both the House and the Senate for a conclusive vote. At this juncture, no further modifications are permissible. Both chambers are required to approve the report in its entirety, as presented. 

If both the House and Senate endorse the conference report, the bill is forwarded to the governor, who may either enact it into law or exercise a veto. Conversely, if either chamber rejects the report, the bill is rendered unsuccessful and does not become a law.
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Significance of the Process

This procedural framework ensures that both legislative chambers play an equitable role in determining the final version of the law. It also facilitates a thorough examination of any amendments and fosters collaboration among lawmakers to achieve consensus.

 Although the process may be protracted, it is structured to promote compromise and comprehensive scrutiny before the enactment of a bill into law.

For those interested in tracking the progression of bills through the Washington State Legislature, the official website can be accessed at: https://leg.wa.gov/learn-and-participate/
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​Join us for a Regional Advocacy Roundtable bringing together business leaders and local law enforcement for an open, solutions-focused conversation on crime prevention, public safety, and the evolving legal landscape impacting our business community.

This session will provide an important forum to discuss new and proposed legislation that may affect local businesses—particularly in areas such as property crime, retail theft, and public safety. Law enforcement representatives will also provide insight into the current legal tools and enforcement strategies being deployed to address crime, as well as recent trends in criminal activity across the region.

Participants will:
• Hear updates on legislation with potential business impacts.
• Review current crime statistics relevant to the Tri-Cities area and surrounding communities.
• Learn about local enforcement efforts and how laws are being applied to combat retail theft and other criminal activity.
• Explore practical tactics, deterrence tools, and community programs available to help businesses safeguard their property, employees, and customers.

This roundtable is designed to foster collaboration, improve communication between sectors, and empower businesses with the information and tools they need to be proactive partners in promoting a safe and vibrant commercial environment. We encourage business owners, managers, and community stakeholders to attend and share their perspectives.

​A Brief History of the Gas Tax in Washington State — and Why It Still Matters

The gas tax might seem like just a few extra cents per gallon, but in Washington State, it plays a crucial role in how we build and maintain our roads. The story behind the gas tax—and how Washington uses it—is also tied to one of the most important pieces of state law: the 18th Amendment to our state constitution.

The Origin of the Gas Tax in Washington

Washington was an early adopter of the gas tax. The state enacted its first gas tax in 1921, at 1 cent per gallon. The goal was simple: find a way to pay for road construction and maintenance as automobiles became more common. Over the years, that rate steadily increased to keep up with inflation and the growing need for highway infrastructure.

By 2023, Washington’s gas tax stood at 49.4 cents per gallon, making it one of the highest in the nation—ranking third after California and Pennsylvania. Add the federal gas tax (18.4 cents), and drivers in Washington pay nearly 68 cents per gallon in combined fuel taxes.


Here’s a quick look at how Washington stacks up:
State                                         State Gas Tax (Approx.)
California                                       ~58 cents
Pennsylvania                                 ~57 cents
Washington                                    49.4 cents
Oregon                                         ~38 cents
Idaho                                            ~33 cents
National Avg.                                ~30 cents

Washington consistently ranks in the top five for state gas taxes. The high rate reflects the state’s heavy investment in transportation infrastructure—and a legal requirement that restricts how those dollars can be spent.

The 18th Amendment: Protecting Transportation Funds

In 1944, Washington voters approved the 18th Amendment to the state constitution. It says that money collected from gas taxes and vehicle license fees must be used only for highway-related purposes. That means:

• Building and repairing roads and bridges
• Policing highways
• Paying off bonds for road construction

It cannot be used for:

• Public transit (like buses or light rail)
• Bike or pedestrian projects
• General government expenses

This restriction makes Washington’s transportation funding system fairly rigid. Even as many people call for greener, multimodal transportation options, the 18th Amendment locks gas tax revenues into road-focused uses.
Why It Matters for the Future

As cars become more fuel-efficient and electric vehicles (which don’t use gas at all) become more common, gas tax revenues are declining. But because of the 18th Amendment, replacing that revenue with something like a road usage charge (RUC) or mileage tax would require either a constitutional amendment or new legislation crafted to work within existing rules.

Lawmakers and policy advocates are already debating how to modernize transportation funding. But any major changes will need to reckon with the legal and historical legacy of the gas tax and the 18th Amendment.

Want to know more about upcoming proposals to change how transportation is funded in Washington? Stay tuned—2025 might be a turning point.

In the past week, the Washington State Legislature introduced two major transportation budget proposals—one from the Senate and one from the House—that aimed to tackle the state’s urgent infrastructure and funding needs. Both proposals reflect growing concerns over how to sustainably finance transportation systems as traditional revenue sources, such as the gas tax, become less reliable in the face of evolving technologies and consumer behavior.

Key Components of the Budget Proposals

1. Gas Tax Increase:

Both the Senate and House proposals include raising the state’s gas tax, which is a primary source of transportation revenue. The Senate’s plan proposes a 6-cent per gallon increase beginning July 1, 2025, with a 2% annual adjustment to account for inflation. The House version goes further, proposing a 9-cent increase, also indexed to inflation. These increases are projected to generate $1.5 billion and $1.8 billion respectively over six years.

2. Electric and Hybrid Vehicle Fees:

To address the declining gas tax revenue as more drivers adopt fuel-efficient and electric vehicles, both proposals introduced higher registration fees for these vehicles. The goal is to ensure that all drivers contribute to maintaining the state’s transportation infrastructure regardless of the fuel type.

3. Sales Tax Reallocation:

A key element of the House plan is the reallocation of 0.3% of the state’s sales tax revenue, amounting to approximately $800 million annually, directly into the transportation budget. This aims to create a more stable, long-term funding source that is not solely dependent on user fees such as fuel taxes.

4. Project Commitments and Maintenance:

Both proposals prioritize the completion of existing projects, preserve the current infrastructure, and improve road safety. The Senate’s six-year budget plan commits approximately $9.2 billion to these efforts and also addresses a projected $1 billion shortfall in the 2025–27 transportation budget, securing funding commitments through 2031.

Challenges in Crafting a Sustainable Budget

While both chambers agree on the urgency of addressing transportation funding, several challenges complicate the path to a final budget agreement:

1. Balancing Revenue and Public Burden:

Raising gas taxes and vehicle fees, while necessary for funding, could place a heavier burden on Washington residents, especially those with lower incomes or living in rural areas where driving is essential. Lawmakers must balance the need for revenue with fairness and affordability.

2. Gaining Public Support:

Public resistance to tax hikes and new fees remains a persistent obstacle. Legislators must clearly communicate the long-term benefits of the proposed changes, such as safer roads, less congestion, and job creation, to build public understanding and support.

3. Political Consensus:

Reaching bipartisan agreement is critical but can be difficult, as lawmakers may prioritize different funding methods or infrastructure investments. The budget must reconcile these differences to gain enough votes for passage.

4. Adaptation to Changing Transportation Trends:

As electric vehicles become more common and fuel efficiency improves, traditional revenue sources such as gas tax will continue to decline. Washington must begin transitioning to a more resilient funding model that reflects this reality, possibly through mileage-based fees or the broader use of general tax revenues.

Potential Solutions and the Path Forward

To address these challenges, legislators have been exploring a combination of traditional and innovative funding strategies. These include:

• The implementation of equitable fee structures ensures that all vehicle types contribute fairly.

• Reallocating existing tax revenues such as state sales tax to reduce reliance on user fees.

• Engaging the public with transparent messaging about how funds will be used and why investments are needed.

• Planning for future shifts by studying long-term trends and developing alternative funding models that align with changing vehicle usage patterns.

The 2025 transportation budget discussions represent a pivotal moment for Washington State. With thoughtful negotiations and forward-thinking solutions, the legislature has the opportunity to create a more equitable, sustainable, and effective transportation system that meets both current demands and future challenges.