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Postman on Politics

Chief political reporter David Postman explores state, regional and national politics.

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March 10, 2008 4:16 PM

In lean budget year, newspapers look for tax cut

Posted by David Postman

Washington newspapers are looking for a $1 million tax break this year - a tax break that’d be worth nearly $3 million to the industry in the next full, two-year budget. The bill to cut taxes on money made from online ad sales passed the House 85-5 and awaits a vote in the Senate.

House Bill 2585, sponsored by Rep. (and treasurer candidate) Jim McIntire, D-Seattle, would change the definition of a newspaper to include online publication. That would mean newspapers would pay the Business and Occupation tax rate of 0.484 percent for printing and publishing rather than the 1.5 percent rate charged on income made from other services. The existing tax scheme - with the existing tax break on ad sales - became law before newspapers were published online as well as on paper.

For the coming year, the tax cut would mean a loss of $946,000 in state revenue, according to legislative committee estimates, and $2.7 million for the next two-year budget. The bill was amended by the Senate Ways and Means Committee to sunset after three years.

The Department of Revenue is “concerned” about the bill. That’s a semi-official term meaning they haven’t taken a position for or against it. But the Department doesn’t sound too supportive based on this description of the concerns.

Allied Daily Newspapers, the newspaper lobbying group, has been making the case for the tax cut. Meanwhile, newspaper editorial boards have been urging lawmakers to save money this year to prepare for lean budget times ahead.

The Times said the state could set aside $1 billion-plus and that lawmakers should cut spending until they have reached that goal.” And the P-I, which is in a joint operating agreement with The Times, has said lawmakers have to prepare for hard choices, “even if that means holding back on some of the new spending being discussed ..."

Of course, if this $1 million tax break is necessary to get my expense account paid, this item was posted without my knowledge, I’m on vacation, I was quoted out of context, bloggers aren’t real journalists anyhow, and this post will self-destruct in five seconds.

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