Association of Washington Business – Updated Weekly

Income tax on track to become law: At any moment, the state House is expected to vote on a bill establishing a 9.9% income tax on Washington households earning more than $1 million annually. Gov. Bob Ferguson has pledged to sign a revised version of the bill released on Friday.

The implications: As the income tax becomes law, it will “likely trigger years of legal challenges, a ballot initiative campaign, and significant uncertainty around Washington’s tax structure,” Bellevue Chamber President Joe Fain writes in a new post. “Supporters argue the tax is necessary to stabilize the budget, address regressivity, fund education, and offset federal cuts. But when the numbers are examined closely, these arguments become much harder to sustain.”

• It’s highly unlikely a new state income tax will remain limited to millionaires if state spending continues to outpace revenue, Fain notes. Over the past decade, state spending has grown about 15% per biennium on average.

Real-world impacts on businesses: AWB remains opposed to the tax, even as lawmakers have expanded the tax relief measures. While the bill targets high earners, it would impact pass-through income from S-corps, LLCs and other pass-through entities.

“The majority of my (pass-through) income is not cash I ever see,” Ryan Likkel, owner of Western Refinery Services, a Ferndale-based construction company, tells The Seattle Times. “If I’ve got to spend cash on (the millionaires) tax, I’ve got less cash to spend on business growth and new equipment investments.”

AWB’s most recent employer survey hit a nerve, making headlines in Washington and throughout the country, writes AWB President Kris Johnson in his latest newspaper column. The results showed 44% of business leaders are considering moving their personal residence out of state, and more looking to relocate their business. Responding to the survey, some lawmakers acknowledged the risk of business relocation, while others were skeptical.

For legislators who are trying to pass a bill to bring an income tax to Washington, it was an inconvenient distraction as reporters drew the connection between declining business sentiment and the push for yet another new tax.

The wrong question: In the final days of the legislation session, lawmakers should consider how their votes will impact the economy and small- and medium-size businesses, Johnson writes.

Asking whether businesses will really leave is the wrong question. This isn’t a time for lawmakers to play chicken with the economy.

A better question is, what can lawmakers do to grow the economy? What’s their plan for supporting businesses, boosting competitiveness, and strengthening the economy in every part of Washington?

Read the full column in South Sound Business.

Great day shaping up: AWB’s 2026 Spring Summit, May 5-7 in Vancouver, will give attendees a full day of interesting, relevant sessions. The following discussions have just been added to the agenda:

• Federal and State Election Preview

• Navigating the Family Enterprise (Multi-generational family business spotlight)

• 2026 Legislative Session Wrap-up with AWB’s Government Affairs Team - presented by Alaska Airlines

• Straight Talk from the Capitol: Q&A session with outgoing legislators - presented by 1-800-GOT-JUNK

Powerful keynotes bookend the day: Former Washington Gov. Christine Gregoire and Attorney General Rob McKenna will kick off the event with a morning keynote discussion from 9-10 a.m. Wednesday, and the day concludes with former two-term Maryland Gov. Larry Hogan and former White House Chief of Staff, Chicago Mayor and U.S. Ambassador to Japan Rahm Emanuel.

Register and book your room: Reserve your spot soon for AWB’s 2026 Spring Summit, co-presented by BECU and The Boeing Company. And make sure to take advantage of AWB’s discounted room block at the Hilton Vancouver Washington to ensure you can stay close to the action. Limited space is available and rooms will sell out.

Sponsorship opportunities available: If your business would like to get involved with one of the biggest Spring events that AWB has ever thrown, please reach out to Brian Temple at briant@awb.org soon. Only a few great partnership opportunities are left.

Impact on employers: As the legislative session enters its final week, the AWB government affairs team is working hard to ensure that the voice of the business community is heard in the Legislature. After the session ends, you’re invited to AWB’s free post-session webinar at 11 a.m. Wednesday, March 18.

• Our issue-area experts will share the impact of the bills that passed and what we might see in the future. Bring your questions — this will be an interactive time for AWB members.

Get more legislative insights: Learn and connect in person at AWB’s 2026 Spring Summit, which will feature a full legislative review from AWB’s government affairs team.

History lesson: In 1932, Washington voters approved an initiative to establish a state income tax — but months later, the state Supreme Court struck it down, ruling 5-4 it violated the state constitution. The Seattle Times has more on the history of the income tax — and why Washington has long been without one.

• “While voters said yes to the tax in 1932, they’ve spurned income tax proposals 10 times since then,” the Times writes. “Most recently, in 2010, a proposed tax on people earning more than $200,000 a year was soundly defeated, losing in 38 of 39 counties.”

Ruling survives 90 years later: The 1933 ruling still stands today. As the proposed income tax on millionaires moves toward final passage, critics say the proposal goes against decades of established legal precedent.

“This is actually not at all complicated. This is a bill which clearly conflicts with the language of the (state) constitution, its plain meaning,” said former state Attorney General Rob McKenna, now an attorney for the Orrick law firm.

Delve into employee handbooks: AWB’s HR & Employment Law webinar series continues at 10 a.m. Wednesday with a session on future-proofing your employee handbooks. Experts from Washington’s top law firms will cover how to create a robust handbook tailored to meet the demands of the evolving employment landscape. The session will run 90 minutes and include ample Q&A time.

You’ll learn:

• Strategic handbook crafting

• Legal updates

• Policy pitfalls and solutions

Meet you continuing education needs: CLE, SHRM, HRCI Credits are available.

Pay once, enjoy them all: The AWB HR & Employment Law Webinar Series is best valued as a package where you purchase the entire six-month program. Classes can also be purchased individually.

EMPLOYMENT LAW

Updates from James Crandall, lead on legal affairs, labor & employment law:

• Banning noncompetes: House Bill 1155, banning all noncompete agreements, is heading to the governor’s desk after passing the Senate along party lines last week. While the Senate adopted one helpful amendment, AWB remained opposed until the end. Throughout the session, we voiced support for the current law that reflects a carefully negotiated compromise reached in 2019, emphasizing that without the availability of narrowly tailored noncompetes, employers may be less willing to invest deeply in employee development.

• Immigrant worker protections: House Bill 2105, Attorney General Nick Brown’s immigrant worker act, passed the Senate 27-21 Thursday night; Democratic Sens. Claudia Kauffman and Lisa Wellman joined Republicans in voting no. AWB opposed this bill due to the penalty structure that includes a costly private right of action. Lawmakers considered an amendment to restructure the PRA, but unfortunately did not adopt it.

• Workers’ comp: Senate Bill 5847 passed the House 67-28 Friday. AWB opposed the bill due to concerns about its potential to increase costs within the workers’ compensation system.

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EDUCATION & WORKFORCE

Updates from Emily Wittman, director for education, workforce, child care, health care & federal affairs:

• Private college grants: Senate Bill 5828, which would restore financial aid for students attending Washington’s private, not-for-profit colleges, is still alive. AWB encourages House lawmakers to pass this bill, which would reverse the effects of last year’s funding cuts. This bill will support students and the independent colleges that produce some of our state’s top talent.

• Permitting timelines: Unfortunately, a bill to improve timelines for state permitting and licensing is not moving forward this year. Senate Bill 5968, building on Gov. Bob Ferguson’s Executive Order 25-03, did not survive Friday’s cutoff to pass opposite house bills. The bipartisan bill would have required state agencies to publish permit and licensing data, set clear decision deadlines, and refund application fees if deadlines aren’t met. AWB thanks the sponsors of the legislation in the House and Senate, Rep. Adison Richards and Deb Krishnadasan, Democrats from Gig Harbor.

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TAX & FISCAL POLICY

Updates from Max Martin, tax and fiscal policy lead:

• Business tax amnesty program: House Bill 2615, which temporarily reinstate a business tax amnesty program, is still in play. AWB supports this bill, which will allow businesses to come forward and pay back taxes without facing penalties. The program would give struggling small businesses a clean slate, including those hit with Washington’s steep penalties on unpaid taxes, while bringing in revenue for the state. The Tri-City Regional Chamber of Commerce and Washington Society of Certified Public Accountants both have helpful posts about it.

• Removing tax exemptions: Two bills that would remove tax breaks were passed out of the House Finance Committee Saturday. Senate Bill 6228 would repeal the preferential B&O tax rate for warehousing and reselling prescription drugs. Senate Bill 6231 would remove an exemption for data center refurbishments. AWB opposes both.

• Cigarette tax: Senate Bill 6129, which would increase taxes on cigarettes and vaping products, was also up for executive session Saturday, but no action was taken. The bill would have raised the state’s cigarette tax for the first time in 16 years, from $3 per pack of 20 cigarettes to $5. AWB opposed this bill.

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TRANSPORTATION

Updates from Ken Short, lead on transportation, land use and housing:

• Commercial truck safety: House Bill 2410, sponsored by Rep. Jake Fey, D-Tacoma, aiming to improve the safety of the commercial trucking industry, passed the Senate with broad bipartisan support 47-1. The bill establishes a commercial truck safety and education council and increases the commercial vehicle safety enforcement fee from $16 to $32. AWB supported this bill, which will help strengthen Washington’s trucking workforce and support training for drivers.

• Employer transportation services: AWB is pleased to see House Bill 1980 pass the Senate by unanimous vote. Sponsored by Rep. Janice Zahn, D-Bellevue, the bill will allow private employer vehicles for transporting employees to access business access and transit-only lanes. The bill, particularly important to Bellevue, would apply to counties with populations of more than two million.

Employers face ‘economic firestorm’ amid rising taxes, costs

The Snoqualmie Valley Record spoke with businesses in unincorporated King County about the compounding effects of rising wages, taxes and other costs — what one restaurant owner calls an “economic firestorm.” The report cites AWB’s winter employer survey, which found growing interest among businesses in leaving the state amid a deteriorating business climate.

“We are in a state that has one of the highest gas taxes,” said Johnny Blair, COO of South Fork restaurant outside of North Bend. “So that’s putting a burden on Washington businesses, and I’m not talking about just restaurants, I’m talking about growers. That puts them at a disadvantage from other states. We have to get our produce from somewhere. It’s got to be trucked. It’s got to be shipped.”

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SeaPort Airlines to launch TSA-free flights from Seattle to Spokane

Business travelers will soon have a new, faster option to get between Seattle and Spokane. Starting March 9, SeaPort Airlines will offer four round trip flights most days between Seattle’s Boeing Field and Spokane’s Felts Field.

“You can wake up in Spokane, do a full day’s business in Seattle and be back home here for dinner,” said Kent Craford, CEO of SeaPort’s parent company, Kalinin Companies.

SeaPort, which began flights between Seattle and Portland last summer, offers a hassle-free travel experience. The airline’s nine-seat Pilatus PC-12 planes fall below TSA thresholds, allowing it to operate from smaller terminals with no security checkpoints. (Read more in this AWB profile.)

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Employers wanted for Workforce Training Customer Advisory Committee

The state Board for Community and Technical Colleges (SBCTC) is seeking business representation on its Customer Advisory Committee, in particular employers in the IT, health care, and advanced manufacturing sectors. Key functions include:

• Evaluate Job Skills program grant requests.

• Advise SBCTC on policy matters regarding both Worker Retraining and Job Skills programs.

• Provide advice to the SBCTC on other workforce development activities of community and technical colleges.

Send nominee names and information to SBCTC’s William Belden.

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Bob Battles confirmed for seat on Board of Industrial Insurance Appeals

The Senate voted Friday to confirm former AWB Government Affairs Director Bob Battles to a position on the Board of Industrial Insurance Appeals (BIIA). Battles has been serving in the position since being appointed in 2024 by then-Gov. Jay Inslee.

Battles spent a decade advocating for employers as AWB’s general counsel and lead on workplace law. Battles has also worked for the state attorney general and in private practice.

The BIAA hears appeals on decisions made by the Department of Labor & Industries on issues that include workers’ compensation, safety, and tax assessments. Battles is one of three members on the board.

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Advertising opportunities available in Washington Business Magazine

AWB has once again partnered with Overland, Kansas-based Strategic Value Media, a leading nationwide provider of print and digital media solutions to the national, state and local trade and membership associations, to help put together the Spring 2026 edition of Washington Business magazine.

A representative from Strategic Value Media may contact you by email or phone to inquire if you want to advertise in the magazine. Please know this is a legitimate call and that SVM is partnering with AWB to provide you with this resource for advertising your products and services.

To learn more about advertising opportunities, please email info@svmmedia.com.

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Last chance to nominate for AWB's Board of Directors

As a member-driven association, AWB's robust Board of Directors is an important source of strength. Nominations are now open for diverse business leaders from across the state, and from employers of all sizes, to serve on the AWB Board. The nomination deadline is March 15.

Send nominee names and contact information to Bonnie Millikan.

Manufacturing bus tour turns 10: Planning is underway for AWB’s 10th annual Manufacturing Week bus tour, Sept. 30-Oct. 7. The 2026 tour will visit shop floors across the state as we celebrate a decade of showcasing manufacturing in Washington. (Check out the sizzle reel from the 2025 tour.)

Get involved: Interested in becoming a tour stop? Fill out the application of interest form and check out the tour stop guide to learn what’s involved.

Free resource: As internship season approaches, the Washington Workforce Portal is here to connect your business with talented students eager to gain hands-on job experience this summer. Register on the portal to list your summer internships and other work-based learning opportunities.

Benefits for employers: What are the reasons to offer an internship or work-based learning opportunity?

• Help create a pool of prepared and motivated employable workers

• Strengthen employees’ supervisory and leadership skills

• Make connections with potential candidates for part-time or full-time jobs

Learn more: For more information, contact the AWB Institute at info@awbinstitute.org.

The clock is ticking: The deadline is less than 100 days away to nominate employers for AWB’s 2026 awards, which recognize Washington’s top employers in a variety of categories, from excellence in family-owned business to innovation in manufacturing. Click to view the award categories fill out the nomination form now. Nominations are due May 29.

• Self-nominations are accepted and encouraged to recognize the quality in your own company. We also have many nominations come in as employers recognize clients and partner businesses.

As you plan your employee benefits for 2026, consider AWB’s HealthChoice Trust. More than 2,500 small employers participate, with 24 competitive, comprehensive benefit plan designs tailored to meet your needs. PPO plans provide 100% coverage for in-network labs, X-rays and diagnostics.

HealthChoice offers broad access to physicians throughout Premera Blue Cross’s extensive provider networks. Coverage is available to companies with as few as two employees in the following industries: agriculture, automotive services, construction, communications, hospitality, manufacturing, professional services, retail/wholesale, technology and transportation.

For a quote, talk with your insurance producer or visit our website at www.propointservices.com You can also contact Billy Sangster at ProPoint: 866.448.9577.

“Everyone’s taken their piece. It’s a true family business.” ~ Wes Taylor, the chief operating officer at Taylor Shellfish Farms, which raises, oysters, geoducks and mussels on 14,000 acres from Samish Bay near Bellingham to Willapa Bay on the coast. The company’s fifth generation is now stepping into leadership roles, including six Taylor cousins and their spouses.

Last week, state representatives and staff sampled a variety of shellfish at Seafood Day, which showcases Washington’s seafood bounty and educates about the importance of this industry (see photos).