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.
Corporations always seem to find a way to ease their tax burdens, but there would be no way to get around the proposed tax changes. And investors won't like that very much. The legislative session in Washington state will close in just a few weeks, so we will have to see what happens -- but if the Democrats successfully pass the proposed tax changes, Amazon, Microsoft and the people who invest in those companies could be in for a rough ride. Disclosure: The writer holds no positions in any of the companies mentioned. Follow @ReneeAnnButler This article was written by an independent contributor, separate from TheStreet's regular news coverage.