632 Washington business owners announced today that they were moving their businesses across the river to Oregon, after the Washington Legislature announced plans to increase the Business and Occupation Tax - in effect, a gross receipts tax - on service businesses from 1.5% to 1.8% in order to balance the state budget.
"Many of us started thinking about making this move a few months ago, when we started reading about the Measures 66 and 67 campaign and discovered that Oregon was planning to adopt an alternative minimum tax that looked sort of like the B&O tax, but was only 0.1% or a flat $150," said Vancouver dermatologist Jim Dunning. "We had no idea that before this, Oregon had nothing like the B&O tax at all. Now that Washington's raising the B&O tax even higher, we'd be fools - not just in April but year 'round - to stay in Washington State another minute."
Oregon Governor Ted Kulongoski was quick to welcome the Washington 632, and, in an apparently unscripted moment, admitted that the passage of Measures 66 and 67 was in part a marketing strategy designed to attract Washington businesses.
"Actually, we'd always wondered why Washington business owners didn't recognize that our taxes on business were actually so much lower," Kulongoski said. "But we thought it wouldn't be neighborly to just run ads in Washington saying 'cross the river, your taxes will be lower.' We realized last year that a campaign over a small business tax increase in Oregon would actually have the side effect of publicizing how low Oregon taxes on businesses actually are."