WeVote
Log In

Bill

Bill

SB 5733

Creating a business and occupation tax deduction and increasing the tax rate for persons conducting payment card processing activities.

2023-2024 Regular Session Introduced by Chris Gildon and 2 co-sponsors

SB 5733 increases Washington's B&O tax rate on payment card processors while creating new deductions for other businesses, potentially raising costs for merchants using credit card services.

By resolution, reintroduced and retained in present status.
0
WeVote Research Nonpartisan
Bill Summary · SB 5733

Legislative bill overview

SB 5733 modifies Washington State's business and occupation (B&O) tax by creating a new deduction for certain businesses while simultaneously increasing the tax rate specifically for payment card processing activities. The bill targets companies that process credit card and payment transactions, subjecting them to a higher B&O tax rate than other business categories.

Why is this important

Payment processing is a critical infrastructure service affecting retail, e-commerce, and service businesses across the state. Changes to how this sector is taxed can ripple through the economy by affecting transaction costs, merchant fees, and ultimately consumer prices. Washington's tax structure significantly impacts business location decisions and competitiveness in the technology and financial services sectors.

Potential points of contention

  • Competitive disadvantage: Singling out payment processors for a higher tax rate may disadvantage Washington-based companies like Square or local fintech firms compared to out-of-state competitors, potentially driving business relocation.
  • Pass-through costs: Payment processors typically pass tax increases to merchants as higher processing fees, which small businesses and nonprofits may absorb more heavily than large corporations.
  • Fairness of targeted taxation: Targeting one specific industry sector for higher taxation raises questions about whether this constitutes discriminatory tax policy and whether other industries with similar profit margins receive equivalent treatment.

Compiled from official sources — confirm details with the bill’s official record.

Sign in to ask a question.