The prospect of making Olympia command central for all business tax collections in the state is not going down well in Seattle, or any other large city in Washington for that matter. The big cities say they'll end up on the short end of the financial straw because state auditors won't be as aggressive in hunting down cheaters.
Seattle, for one, figures Gov. Chis Gregoire's proposal, if it were to become law, would result in annual losses between $23 million and $44 million. Tacoma estimates its losses at $4 million to $7 million.
City officials argue that things are bad enough coping with revenue shortfalls and believe the governor's plan to simplify tax payments for the state's businesses will only worsen the situation.
Seattle finance director said the losses would come from a variety of places, including a 1 percent administrative fee charged by the state to takeover tax collection, a loss of tax penalties and interest paid by tax dodgers -- which would kept by the state -- and a change in the way local tax dollars are apportioned between the municipalities where the money is earned.
Still, the Association of Washington Business says a good number of its members, especially small companies without accountants, do need some assistance in navigating the state's complex local tax system.
"Just understanding all the local government rules is tough," Association president Don Brunell, tells The Associated Press. "It's probably one of these issue where you come to the point where it's fish or cut bait. And we're encouraging them (legislators) to pass it."
Lee, the city's finance director, though, disputes arguments from the state that Seattle could make back some of the money, perhaps by collecting more from out-of-state businesses with no offices in Washington.
Lee says Seattle, Bellevue, Tacoma and Everett are already working to devise a more simplified local tax system and that lawmakers ought to wait and see if that works.