Honeyford bill would spare honeybee industry from sting of B&O tax

honeybee-honeycomb-macro_26201_990x742The Senate Agriculture, Water and Rural Economic Development Committee today considered a bill aimed at putting more buzz into the state’s honeybee industry. Senate Bill 6402, sponsored by Sunnyside Sen. Jim Honeyford, would exempt honeybee products and services from the state’s onerous business and occupation tax by defining them as agricultural products.

“Washington has many crops that depend upon bees for pollination to produce profitable crops,” said Honeyford, who serves as ranking Republican on the committee. “All kinds of products come from bees, including honey, pollen, beeswax, propolis, and many others. Just as the state considers milk that comes from cows to be an agricultural product, so should it consider products derived from honeybees.”

Washington is the only state to impose a business and occupations tax, which is levied on the gross receipts of all business activities. Unlike a corporate net income tax, there are no deductions for the costs of doing business. Small businesses often struggle in their first several years just to make a profit; many in Washington fail as a result of hitting the low B&O threshold but ending up in the red and losing money.

However, no B&O tax applies to any Washington farmer selling agricultural products at wholesale or to any farmer who grows agricultural products owned by others, such as custom feed operations. Honeyford, who represents the 15th Legislative District, says honeybee farmers should fall under that category, and that by relieving them of such a crippling tax burden they would likely use the extra capital to reinvest in their businesses, expanding and creating more private-sector jobs.

“The Senate Majority Coalition Caucus rolled out its 2014 Jobs Now! package of legislation yesterday, and I’m happy to assist that effort with the introduction of Senate Bill 6402,” Honeyford noted. “Eliminating the B&O tax on small businesses is one of the top priorities, especially for our honeybee industry that has to compete against out-of-state bee keepers who have an unfair advantage.”

Honeyford added that the exemption provided by his bill would be permanent and not subject to the 10-year expiration date or a tax preference performance statement. If passed into law, SB 6402 would take effect 90 days after the 2014 session adjourns.