This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

State Tax Knife May Slice Amazon, Microsoft

NEW YORK ( TheStreet) -- Washington is a near-mythical state, where the trees tower higher than most buildings, pot is legal, and beaches or state parks are omnipresent. The state also offers another big reason people choose to live there: taxes, or rather a lack thereof.

In the state of Washington, residents don't pay state income taxes and companies don't pay corporate income taxes. As for companies, they're required to pay a gross receipts tax that's fairly low -- 0.13% to 3.3%. The state also offers a variety of other tax breaks for corporations, making it a popular spot for companies to be headquartered, especially those in technology. Point in fact, Amazon (AMZN - Get Report) and Microsoft (MSFT - Get Report) both call Washington state home.

However, that could all be changing.


Gov. Jay Inslee is proposing to cut the tax break on business and occupation taxes by 25%. Granted, Inslee's efforts are all part of a bid to patch together the more than $1.5 billion deficit projected for the budget ending in mid-2015 and respond effectively to a Washington Supreme Court ruling that the state isn't contributing enough to public education -- but he seems to have invoked a much broader reaction.

Politicians in Washington are looking to make up a deficit while concentrating on public education -- prompting Democrats in the Washington House to propose similar changes at the state level. The bill on the table right now would narrow Business & Occupation (B&O) and sales tax exemptions for import commerce. The technology sector would be hit the worst, as the Democrats seek to narrow the high-tech research & development (R&D) B&O credit and repeal the R&D sales & use tax exemption.

Education is a hot button cause that is hard to argue against -- but that doesn't mean the companies in the state are going to be supportive.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
AMZN $430.99 0.02%
MSFT $46.92 -0.66%
TSLA $248.35 -0.44%
AAPL $129.96 -0.44%
FB $80.44 0.19%

Markets

DOW 18,011.94 -28.43 -0.16%
S&P 500 2,109.60 -2.13 -0.10%
NASDAQ 5,076.5240 -6.4050 -0.13%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs