Lacey City Council approves tax exemption for small, startup businesses

Three-year business and occupation tax exemption takes effect in 2015

Staff writerApril 24, 2014 


The Lacey City Council Thursday added to the city’s business-friendly image after the council approved a three-year business and occupation tax exemption for small, startup businesses that takes effect Jan. 1, 2015.

The tax exemption is not retroactive, but applies only to new businesses, and the business has to make under $500,000 in annual gross revenue. If the business were to exceed that amount during the exemption, it would have to pay B&O tax.

The B&O tax exemption is designed to give new businesses a helping hand, stimulate the economy, as well as possibly attract more businesses to the city. 

“Anything we can do to reduce that (tax) burden is a good thing,” said councilman Jeff Gadman, who also pointed out that the B&O tax is hated by business owners, leading councilman Lenny Greenstein to nod in agreement.

Business owners have such disdain for the tax because they have to pay it whether their business makes money or not.

Virgil Clarkson was absent Thursday night, but the rest of the council and Lacey Mayor Andy Ryder unanimously approved the exemption.

“It’s another example of Lacey leading in the county,” Ryder said.

But the council also had to make a related move as a result of the tax exemption. 

The tax exemption eliminates about $30,000 in annual revenue to the city, so to offset that loss, the council also approved an annual business license renewal fee.

In addition to the initial business license fee of $25, businesses -- also beginning Jan. 1, 2015 -- will pay a $10 annual renewal fee.

This is not the first business-friendly move by the council. 

Last month, the council approved reducing the city’s gambling tax rate on social card games to 7.5 percent from 10 percent to help Hawks Prairie Casino stay in the community and employ about 140.

Also Thursday night:

Councilman Michael Steadman brought in a thin, grocery-style plastic bag -- the kind of bag that will be banned July 1 -- that he found in his neighborhood, following the council’s decision in February to approve a plastic bag ban.

The bag, which was paid for by a group called Save Our Choice, lists the names of the four Lacey council members who voted for the ban, including Steadman’s, along with their phone numbers and term expiration dates.

“Phone these politicians to ask if they voted to ban your plastic bags and force(d) you to pay for paper,” the bag states.

Steadman said after Thursday’s meeting that he stands by his plastic bag ban vote and thinks the council made a good leadership decision.


Rolf Boone 360-754-5403

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