Washington Small Businesses Warn Income Tax Could Drive Companies Out of State

Washington’s new income tax is raising concerns among small-business owners, particularly those whose businesses are structured as pass-through entities. Critics of the tax argue that business income reported through owners could create significant tax exposure during strong years. Kelly Chambers, the Small Business Administration’s Pacific Northwest regional administrator, says she regularly hears from business owners considering leaving Washington for states offering what they view as a more stable tax and business environment. Chambers also says some businesses are being offered incentives, including land, buildings and labor, to relocate elsewhere.