Jacobsen’s bill to help public service businesses unanimously passed by the House Finance Committee

A bill from Rep. Cyndy Jacobsen that would help businesses subject to the public utility tax (PUT), has passed the next step in the process to become law.

House Bill 1561, which unanimously passed in the House Finance Committee Tuesday, 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.

The 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.

“This bill is really about equity. When the Legislature adjusted the B&O thresholds in 2022, our small businesses and owner operators who pay public utility taxes were forgotten,” said Jacobsen, R-Puyallup. “This legislation fixes that.”

HB 1561 would double the threshold, which has not been adjusted since 1996, 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 be required to pay taxes on their business income.

The bill would also cut costs and administrative work for both small businesses and the state because many contractors would not reach the new threshold.

“This legislation would benefit several types of businesses, but it would be especially helpful to Uber and Lyft drivers,” noted Jacobsen. “Most of these drivers are simply trying to make ends meet. This legislation would eliminate unnecessary taxation and paperwork and make it much easier for them to operate their businesses.”

The bill now waits for a vote by the entire House.


Washington State House Republican Communications