This article is the second part of a short series explaining the basics of a margin tax and how it compares to Washington’s B&O tax. Although a margin tax might seem more fair because it considers some business costs, it doesn't mean it is simple. In fact, one major concern is that it could make the tax system more complicated for employers.

Washington’s B&O tax is often criticized, but its basic structure remains straightforward. It taxes gross receipts based on the business classification. A margin tax typically involves more calculations because the business must identify eligible costs, select the deduction method, and determine its taxable margin. This often results in increased recordkeeping, additional accounting support, and more time spent on compliance.

This is especially important for small businesses. A small firm might benefit from a lower tax burden if its margins are thin, but it could also face a more complicated filing process. For some owners, the extra paperwork and complexity might outweigh the tax savings. In other words, a margin tax might fix one problem but create another.
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The main lesson for Washington businesses is that how a tax is structured matters more than what it's called. A margin tax could benefit some companies, especially those currently taxed heavily on gross receipts, but it wouldn't benefit all businesses equally. The next article in this series will examine the larger policy question: what happens if Washington actually eliminates the B&O tax and replaces it with a margin tax.

This article is the first in a short series comparing a margin tax with Washington’s Business & Occupation (B&O) tax. The goal is to help business owners understand the basic concept before exploring the tradeoffs. Generally, a margin tax differs from the B&O tax because it taxes a business after certain cost deductions are allowed, while the B&O tax is based on gross receipts.

That difference matters because Washington’s B&O tax can be applied even when a business has very little profit left. A company might seem to have strong sales on paper, but after paying wages, rent, materials, fuel, and other operating costs, the actual profit could be much lower. A margin tax is often discussed as an alternative because it aims to better reflect a business’s actual financial situation instead of taxing all revenue.

For some businesses, that can be quite advantageous. Companies with high revenue but narrow profit margins—such as retailers, manufacturers, wholesalers, contractors, and certain agricultural businesses—might find a margin tax more sensible than a gross receipts tax. Small businesses in these sectors often face pressure when taxes are based on sales rather than on what they actually keep.
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In simple terms, supporters of a margin tax often argue that it more accurately reflects the true cost of doing business. This doesn't mean it is always better, but it explains why the idea often comes up in tax policy discussions. In the next article in this series, I will explore the other side of the debate: how a margin tax can also create new problems, especially regarding complexity, compliance, and varying impacts across industries.

​Affordable housing is a growing problem in Washington. When workers cannot afford to live near their jobs, employers struggle to hire and retain employees, and communities experience increased pressure on roads, services, and growth. Inclusionary zoning offers one way for local governments to tackle this issue by requiring or encouraging developers to include affordable homes in new residential projects.

In Washington, inclusionary zoning can be either voluntary or mandatory. Voluntary programs offer benefits such as increased density, reduced parking requirements, fee waivers, or faster permit reviews in exchange for affordable units. Mandatory programs require affordable housing in specific developments, often in areas where additional housing capacity has already been approved. Some programs also allow developers to pay a fee instead of building the units on-site.

State law provides the foundation for these programs. Under RCW 36.70A.540, cities and counties planning under the Growth Management Act can create affordable housing incentive programs. Usually, rental units must serve households earning up to 50 percent of the county median income, while ownership units must accommodate households earning up to 80 percent. These units are required to stay affordable for at least 50 years.

Several cities in Washington, including Redmond, Bellevue, Kirkland, Tacoma, Sammamish, Bothell, Issaquah, Kenmore, Marysville, and Federal Way, have adopted this approach. Their programs demonstrate that inclusionary zoning can be tailored to meet local needs and housing market conditions.

However, this isn’t an easy solution. Inclusionary zoning generally works best in strong housing markets where development stays financially feasible. If requirements are too strict, they can hinder new construction. That’s why local governments need to carefully design these programs and find a balance between affordability goals and market conditions.
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For businesses, this issue is important because housing impacts workforce stability, commuting patterns, and long-term economic growth. When implemented effectively, inclusionary zoning can help communities expand their housing options while strengthening the local economy.

Washington’s sales tax system may seem simple, but the money collected from each sale is divided among different levels of government. For businesses, the main point is clear: sales tax rates are not just numbers on a receipt. They reflect state and local policy choices that can influence compliance, business operations, and the overall cost of doing business in Washington.

The state receives 6.5 percent of the retail sales tax. Additionally, local governments receive an additional share under a structure determined by state law. Since these local taxes are coordinated across cities, towns, and counties, they don't simply add up within the same jurisdiction. That’s why Washington’s minimum combined sales tax rate starts at 7.5 percent.

Rates above that level usually result from additional local taxes approved for specific purposes such as transportation, public safety, criminal justice, housing, behavioral health, and public facilities. Transit districts and other special-purpose districts might also add their own sales tax components. Consequently, rates can differ significantly from one city to another.

That matters for businesses, especially those with multiple locations or customers in different jurisdictions. In areas like the Tri-Cities, local rate differences can reflect investments in transit, public safety, and community amenities. For business owners, sales tax isn't just a compliance issue; it also demonstrates how local communities fund services and infrastructure that support growth and commerce.

The main point is that Washington’s sales tax system acts both as a source of revenue and as a reflection of public policy. Understanding how these components work can help businesses stay compliant, plan more effectively, and better evaluate the markets in which they operate.
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For a deeper review of the topic, readers can return to the original article, MRSC - Where Do Our Sales Taxes Go?

​Eminent domain is one of the government’s most powerful tools because it allows the government to take private property for public projects. In Washington, the goal is to balance two important principles: strong property rights and the need to build roads, utilities, and other public infrastructure. The rules are clear: the project must serve a true public purpose, the owner must receive fair compensation, and the process must go through the courts.

Eminent domain is the government’s power to take private property for public use. The legal process is called condemnation, which may involve taking all or part of a property, or just a limited right like an easement. Washington courts do not simply rely on a government label; they must be able to determine that the use is genuinely public.

Washington’s Constitution imposes strict limits. It generally prohibits takings for private use, with narrow exceptions such as private ways of necessity and certain drainage or ditch work for agricultural, domestic, or sanitary purposes. It also requires that compensation be paid in advance or deposited into court for the owner, and it makes whether a use is public a question for the courts to decide.

Most of the time in Washington, eminent domain has been used for essential public infrastructure such as streets, highways, bridges, water systems, sewer and drainage systems, parks, and public buildings. These purposes are detailed in state law. The biggest controversies usually occur when eminent domain is connected to redevelopment or “economic development,” especially after the U.S. Supreme Court’s Kelo decision in 2005 raised concerns nationwide about taking property for projects that mainly benefit private parties.

In real life, local government usually starts with a specific project and a formal decision by the council or commission. They try to buy the property first. If negotiations fail, the government files a case in superior court. The judge first decides whether the project is for public use and necessary, then the court process determines compensation. Washington also has relocation assistance rules to reduce hardship for people or businesses displaced by public projects.
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For businesses and communities, the benefit of eminent domain is that it can enable projects that help everyone, such as safer roads, utility upgrades, flood control, and freight access improvements. The drawback is disruption: forced relocation, construction disruptions, loss of customer access, and uncertainty near the project site. People in Washington generally support eminent domain when the public purpose is clear and limited but distrust it when they believe it might benefit a private interest. The best safeguard is a careful, transparent process that considers condemnation only as a last resort.

• Washington State Legislature. “Washington Constitution, Article I, Section 16: Eminent Domain.”
• Washington State Legislature. “RCW 8.12.030: Condemnation authorized, purposes (cities and towns).”
• Washington State Legislature. “RCW 8.08.010: Condemnation authorized for general county purposes, petition.”
• Washington State Legislature. “Chapter 8.26 RCW: Relocation assistance for persons displaced by public projects.”
• MRSC. “Eminent Domain (Washington overview and resources).”
• MRSC. “Eminent Domain: The Basics (Washington State Association of Municipal Attorneys conference paper).”
• Institute for Justice. “The Potential for Eminent Domain Abuse in Washington (policy brief).”
• Pierce County Charter. “§ 9.80 Eminent Domain.”
• Washington State Attorney General's Office. “Property owners and politicians request limits to land grabs (news release).”
• Library of Congress. “U.S. Reports: Kelo v. New London, 545 U.S. 469 (2005).”
• Seattle Post-Intelligencer. “Condemnation for eminent domain (commentary reflecting public concerns).”

 This article was written with contributions from AI to organize the information and improve its readability.

​In Part 1, we described what a Transportation Benefit District is, how it can generate funds, and why cities and counties use it to support local transportation needs. Now, we will focus on how these districts can impact daily life.

TBDs can enhance roads, sidewalks, and safety, but they also depend on taxes and fees paid by people and businesses. Knowing both perspectives helps communities decide if a TBD is worthwhile and how to create it effectively.

What TBDs mean for businesses and local communities

For businesses, transportation is closely tied to costs and customer access. Properly maintained roads can reduce vehicle damage and prevent delivery delays. Safe sidewalks and crossings can increase foot traffic, especially in downtown areas and near shopping districts. Better intersections can decrease congestion that slows down employees, customers, and freight.

For local communities, TBD investments can quickly improve safety and accessibility. Fixing sidewalks, ADA curb ramps, safer crossings near schools, and better traffic signals help seniors, students, and people with disabilities travel more confidently. When projects are chosen carefully, they can also strengthen neighborhood ties and boost local economic activity.

Potential positive effects for Washington residents and businesses

TBDs can provide benefits that build over time.

Regular road maintenance helps prevent street failures, which lowers long-term costs. Safety investments can reduce serious crashes and make travel easier and less stressful. Transportation upgrades can also attract more business districts by providing better access, improved walking conditions, and smoother vehicle flow.

Another benefit is local control. A community can allocate funding to the streets and corridors that matter most to local residents and employers. TBD funding can also help a city or county compete for state and federal grants by providing a local match.

Potential negative effects and common concerns

Even small taxes and fees can be a burden.

Vehicle fees increase the annual cost of registration. Flat fees can burden households and small businesses because the amount stays the same regardless of income. Sales taxes can also raise fairness concerns because they take a larger share of income from lower-income households than from higher-income households.

Some businesses might face a greater impact than others. Companies with fleets, including contractors and service providers, could pay more because of multiple vehicle registrations. Retailers might worry that higher sales tax rates could affect customer spending, especially in areas near city borders where shoppers can choose where to buy.

Another common issue is trust. People want assurance that the money is used as promised. Reporting requirements help, but clear project lists, regular public updates, and measurable outcomes are essential for community confidence.

Finally, there are fairness concerns with district boundaries. Residents within the district pay the vehicle fee, while those who drive in from outside might benefit from better streets without paying the fee. Meanwhile, a sales tax can generate revenue from visitors who shop in the district, not just locals.

Transportation Benefit Districts are crucial tools that Washington communities use to finance local transportation projects. As Part 1 explained, they are meant to provide a dedicated funding source for streets, sidewalks, safety upgrades, and related services. Part 2 covers why this tool can be both helpful and controversial.

On the positive side, TBDs can facilitate smoother streets, safer crossings, better access to business districts, and more reliable transportation systems. These improvements can support local jobs and improve quality of life. On the challenging side, TBDs rely on taxes and fees that affect household budgets and business expenses, and they may raise concerns about fairness and equity if not implemented carefully.
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The main point is that TBDs work best when communities are clear about what the money will fund, choose projects that solve everyday problems, report results openly, and consider who pays and benefits. When these elements are in place, a TBD can be an effective way to protect infrastructure, support local businesses, and keep Washington communities moving.

Washington communities need safe streets, reliable sidewalks, and transportation systems that help residents access jobs, schools, and local businesses. One common local tool for funding these needs is the Transportation Benefit District, also known as a TBD. This two-part series explains how TBDs work and what they mean for daily life in Washington. Part 1 covers what TBDs are, how they raise funds, and why local governments choose to use them. Part 2 discusses what TBDs mean for businesses and residents, including the most common benefits and concerns.

Potholes, cracked sidewalks, and traffic backups are more than just inconveniences. They affect emergency response times, customer access to stores, and the safety of pedestrians and cyclists in their neighborhoods. In Washington State, local governments often use a Transportation Benefit District, or TBD, to help fund transportation improvements and services.
A TBD is a local public agency formed by a city, a county, or a group of local governments. Its main goal is to raise local funds for specific transportation projects that benefit the community. Since the money is allocated specifically for transportation, it doesn’t get mixed into a city’s general budget, where it would compete with other needs.

What a Transportation Benefit District is

A Transportation Benefit District is a separate taxing district focused on transportation issues. It can be created by a city or county and is usually governed by the same elected officials on the city council or county commission.
A main aspect of TBDs is their purpose-specific nature. The revenues collected are designated for transportation enhancements and services, allowing communities to concentrate on local priorities such as road maintenance, sidewalk upgrades, and intersection safety improvements.

How TBDs can raise money in Washington

State law offers TBDs several revenue options, but most rely on two tools: a small local sales tax and vehicle license fees.
Vehicle license fees are collected during annual vehicle registration. In many cases, a local government can impose a fee of up to $20 without a vote if the district covers the entire area of the city or county that created it. A TBD can also seek voter approval for higher amounts, including fees up to $100 under state law.

The sales tax authority is also frequently used. Some TBD sales taxes require voter approval, while state law permits limited sales tax authority through a council vote in specific situations when the district encompasses the entire creating jurisdiction. In practice, communities often opt for voter approval for larger or longer-term funding.

TBDs also specify requirements for public accountability. State guidance outlines annual reporting on revenues, expenses, and improvements.

How local governments are using TBDs right now
Across Washington, TBDs are widely used, especially by cities. They are often used to fund practical, visible transportation projects that residents and businesses see every day.

Common uses include street maintenance, pothole repairs, sidewalk repairs, ADA curb ramp installations, safer crossing enhancements, traffic signals, and specific intersection upgrades. In some areas, TBD revenue also supports transit reliability or improvements that help buses operate more efficiently.

Many local governments also rely on TBD revenue as a dependable source of local funding that can enhance grant applications. When a city can demonstrate local matching dollars, it may become more competitive for state and federal transportation grants.

Examples of local TBD use include established city programs and newer county initiatives. Some jurisdictions describe TBDs as a way to fund specific improvements and prevent street maintenance from falling behind each year.

Why TBDs may be necessary

Transportation infrastructure is expensive and gets more costly over time. Costs for materials like asphalt and concrete, construction equipment, and labor tend to rise. At the same time, many cities and counties face a backlog of maintenance. When a community delays routine maintenance, the problem often worsens, and repairs later become much more costly.

TBDs can help by providing local governments with a dedicated, flexible tool to raise local funds. This allows a community to handle urgent repairs, address safety problems, and plan transportation projects more consistently than relying solely on grants or short-term budget decisions.

Transportation Benefit Districts provide Washington cities and counties with a reliable source of funding for local transportation projects. These districts support street maintenance, safety improvements, and other initiatives that help keep communities connected and functional. Additionally, they offer local leaders a faster way to address transportation issues compared to waiting for external grants.
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In Part 2 of this series, we will shift from the “how” to the “so what.” We will explore what TBDs mean for businesses and residents, including the most common benefits, the biggest concerns, and the trade-offs communities face when choosing between taxes and fees to fund transportation.

Incremental tax financing, also known as tax increment financing or TIF, is a strategy used by a city, county, or port to fund public improvements in a designated area by leveraging the projected future increase in property tax revenue from that same area. The concept is that new sidewalks, roads, utilities, parking, stormwater management, and similar upgrades can stimulate private investment. As property values rise after these improvements, the additional property tax revenue, or “increment,” is temporarily set aside to fund the public costs, often through local bonds.


For businesses, TIF can eliminate significant barriers to growth. If a commercial district lacks safe access, modern utilities, or build-ready sites, private projects might stop. When local government uses TIF to fund these essentials, it can attract new employers, support downtown storefronts, and help small businesses draw more customers and enjoy safer, cleaner streets. The downside is that TIF could shift the focus of new public funds, raising concerns about fairness if one area gets major upgrades while others are left behind.


For Washington residents, benefits can include revitalized neighborhoods, increased housing or commercial spaces, and more local jobs, especially when investment targets underused areas. There are also risks. If growth estimates are overly optimistic, the extra revenue might not cover costs as expected, which could strain future budgets. Additionally, when the revenue is used to pay off project costs, other local services may not immediately benefit from the growth in the tax base. Good project selection, realistic forecasting, and transparent public reporting are essential.


Washington’s history with TIF is unusual. Earlier efforts faced constitutional issues, including a Washington Supreme Court decision that struck down Spokane’s use of a previous redevelopment financing law in the 1990s. The state later introduced a different, limited approach called the Local Infrastructure Financing Tool, enacted in 2006, which links local revenue growth with a state sales tax credit and has been examined by state auditors.


In 2021, Washington adopted a modern local TIF framework in state law under chapter 39.114 RCW, and the state has continued to improve the rules in subsequent years. In practice, TIF can be a powerful tool when it is connected to clear community goals such as housing supply, job sites, and infrastructure that truly attract private investment.

The Tri-City Regional Chamber of Commerce relies on its guiding principles to shape policy positions that support a strong economy and a healthy business environment. These principles help the Chamber stay focused, consistent, and aligned with the needs of local businesses when influencing local, state, and federal issues.

Here is an in-depth look at the Chambers Transportation and Infrastructure guiding principle.

Transportation and infrastructure are crucial for any growing community, and the Tri-Cities are no exception. Roads, bridges, airports, rail systems, internet access, and public transit all influence how easily people and goods move. The Tri-City Regional Chamber of Commerce emphasizes that transportation and infrastructure policies should foster economic growth. In essence, safe and efficient movement of people and products supports a healthy local economy.

Businesses of all sizes depend on good transportation systems. Farmers need reliable roads and railways to move crops, stores require shipments to arrive on time, and customers want safe, easy ways to get where they need to go. The same is true for modern infrastructure like broadband internet, which is now just as vital as a road for moving information. If any of these systems fail or lag, businesses and families feel the impact.

When new policies or projects are proposed, the Chamber uses this guiding principle to ask essential questions. Will the project facilitate easier and safer product movement? Does it improve access to work or school? Will it promote growth while avoiding unnecessary costs or delays? These questions help us determine whether to support or oppose proposals affecting transportation or infrastructure in the Tri-Cities.

Over the years, this principle has guided the Chamber's efforts to support projects such as road upgrades, river crossings, broadband expansion, and improved air travel links. These initiatives enhance daily life and make the Tri-Cities more appealing for business, ultimately generating jobs and opportunities in our region.
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Ultimately, transportation and infrastructure aren’t just about roads or cables; they’re about connecting our community. By adhering to this principle, the Chamber helps ensure that new policies and investments keep our region moving forward, both literally and economically.
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In recent years, doctors and medical practices across the United States have been coming together more often and being acquired by large systems such as hospitals, insurance companies, and investment firms. This trend is called physician consolidation, and it is transforming the face of health care. People are worried that these changes might impact healthcare costs, how easily patients can access care, and the quality of care they receive. To understand what is really happening, the Government Accountability Office (GAO) reviewed research on the growth and effects of physician consolidation. Their findings provide a clear picture of how health care is evolving and what that could mean for patients, providers, and the overall healthcare system.

What the Report Found

The GAO report shows that many doctors now work in practices controlled by other organizations rather than being fully independent. Over the past decade, the number of physicians employed by hospital systems has increased significantly. In 2012, fewer than 30 percent were in hospital-owned practices. By 2024, that number had risen to about 47 percent, according to several studies.

The report also states that some doctors are now part of practices owned by private equity firms or large corporate groups. Although this type of ownership still makes up a smaller part of the overall market, it is growing and varies by specialty and region.

Researchers studying these trends suggest that consolidation can increase the overall cost of care. When physicians join hospital systems, their services tend to become more expensive. This can lead to higher spending in Medicare and increased charges to private insurance companies. Several studies in the report found that prices for care increased where consolidation was more common.
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However, the report was less clear on whether consolidation improves the quality of care or makes it easier or harder for patients to access health services. There simply are not enough strong studies on quality and access to provide a definitive answer.