I thought I’d share this call to action from the Rental Housing Association. If you, like I, own rental properties in Washington State. It is important to fight this tax increase. If you are a renter, I think you should fight it also. In the end, these costs will get passed to you. Effectively, as a renter, you will be paying a property tax that homeowners don’t pay.
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PLEASE CONTACT
YOUR STATE LEGISLATORS & GOVERNOR INSLEE IMMEDIATELY OPPOSING A
PROPOSAL TO ASSESS A NEW B&O TAX ON RENTAL INCOME
Governor Jay
Inslee’s newly released budget proposal includes a repeal of B&O
tax exemption for long-term rental of commercial real estate. Repeal of the
exemption would enact a new B&O tax at the service and other
activities rate on income derived from all long-term (30 days or more)
rentals of commercial real estate, including:
- Rental of Apartments,
commercial buildings, mini-storage facilities, and leased
departments.
It is vital
that all RHA members contact their State Legislators and
Governor Inslee
and voice their opposition to enacting a new tax on rental housing. RHA
asks that you send in emails, and make phone calls to your legislators and
the Governor’s office, and encourage anyone else you know to do the
same in opposing the creation of a B&O tax on rental income.
Why does RHA oppose this proposal?
Rental Housing
Owners provide a precious asset to all communities; safe and affordable
housing. Increasing taxes on the rental housing industry would only
serve to increase costs and reduce affordability to tenants. Tax
increases in lieu of greater government efficiencies and effective
spending of current resources is ineffective and the wrong way to fund
our State’s budget. RHA opposes this proposal for the following
reasons:
Uniformity of taxation
- RHA opposes taxes that
discriminate against rental housing, such as business taxes and
regulatory fees that are imposed on rental housing to raise
revenue. The State Constitution includes a uniformity clause,
which provides that “taxes shall be uniform upon the same class of
property within the territorial limits of the authority levying
the tax…All real estate shall constitute one class.” This means
that taxes must be the same on real property of the same market
value. Uniformity requires both an equal rate of tax and equality
in valuing the property taxed.
- While other states have
differential tax rates or different value standards that depend
upon the separate classifications of property, such a system would
not be constitutional in Washington. A 1960 Washington State
Supreme Court ruling found the State Legislature’s 1959 extension
of the B&O tax to the rental of real estate was an
unconstitutional, non-uniform property tax.
- Imposing a B&O tax
against properties already subject to local and state property
taxes amounts to double-taxation for the same services received by
other types of real property. This is discriminatory against
rental housing.
Increases the costs of housing
- The practical impact of
increasing taxes on rental housing is that rents will increase to
cover the new costs imposed under Gov. Inslee’s proposal. Such a
tax increase would negatively impact those who can
least afford increased housing costs.
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Sample letter to Legislature & Governor Inslee***PLEASE NOTE – personalized letters are strongly
recommended in lieu of using the sample provided below.
Honorable <insert name of legislator>,
I am writing
you to voice my strong opposition to the proposal within your budget
which would enact a new B&O tax against income generated by rental
housing.
In 1960 our
State Supreme Court ruled that an extension of the B&O tax to the
rental of real estate is an unconstitutional, non-uniform property tax.
I oppose taxation which discriminates against rental housing, and which
amounts to double-taxation of a property which receives no additional
benefits not received by other types of real property.
Additionally,
any tax increase upon rental housing will hit tenants in the form of
increased rents and other charges to cover the costs of operating
rental housing. Tenants represent a large population which can least afford
increased housing and living costs.
I respectively
ask that you withdraw your proposal to increase taxes upon rental
housing through the creation of a B&O tax on rental income.
Thank you for
your consideration.
Sincerely,
<insert name
here>
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