House Finance Committee holds public hearing on Jacobsen’s public utility tax bill

There could be some good news coming for businesses subject to the public utility tax (PUT) if a new bill from Rep. Cyndy Jacobsen becomes law.

The public utility tax (PUT) is essentially the equivalent to the B&O tax, but it applies specifically to public service businesses, including those that engage in transportation, communications, and the supply of energy, natural gas, and water.

House Bill 1561 would increase the public utility tax exemption threshold and annually adjust the threshold for inflation. Under the current law, a business would have to pay public utility taxes on gross income above $24,000 per year or $2,000 a month.

HB 1561 would double the threshold and increase the threshold yearly with inflation, so businesses who engage in activities that are taxable under PUT would have to collect over $48,000 per year ($4,000 a month) or more to have to pay taxes on their business income.

“Small businesses and owner operators, like Uber and Lyft drivers for example, who pay public utility taxes were left behind when the Legislature adjusted the B&O thresholds in 2022,” said Jacobsen. “This bill simply recognizes and corrects that oversight.”

The bill, which was heard in the House Finance Committee Tuesday, would cut costs and administrative work for both small businesses and the state because many contractors would not reach the new threshold.

“There are many rideshare drivers who would benefit from this change,” said Jacobsen. “Most of these drivers offer their services to make ends meet, not as a primary source of income. This bill would make their lives easier by eliminating unnecessary taxation and paperwork.”

The PUT payment threshold has not been adjusted since 1996.

If the bill is signed into law, it would take effect this year, on July 1.


Washington State House Republican Communications