Business and Occupation Tax.
Washington's major business tax is the business and occupation (B&O) tax.  The B&O tax is imposed on the gross receipts of business activities conducted within the state, without any deduction for the costs of doing business.  Businesses must pay the B&O tax even though they may not have any profits or may be operating at a loss.  A taxpayer may have more than one B&O tax rate, depending on the types of activities conducted.  Major B&O tax rates are 0.471 percent for retailing; 0.484 percent for manufacturing, wholesaling, and extracting; and 1.5 percent for businesses with taxable income of less than $1 million or 1.75 percent for businesses with taxable income of $1 million or more, for services and for activities not classified elsewhere.  Several preferential rates also apply to specific business activities.
 
Business and Occupation Tax Preference for Newspapers.
The tax preference for newspaper printers and publishers was enacted in 2009.  Qualifying newspaper printers and publishers receive a reduced B&O tax rate of 0.35 percent compared to the standard rate of 0.484 percent.  In 2015, the preference was extended and is set to expire July 1, 2024.
 
The term "newspaper" is defined as:

• a publication issued regularly at stated intervals at least twice a month and printed on newsprint in tabloid or broadsheet format folded loosely together without stapling, glue, or any other binding of any kind, including any supplement of a printed newspaper; and
• an electronic version of a printed newspaper that shares content with the printed newspaper; and is prominently identified by the same name as the printed newspaper or otherwise conspicuously indicates that it is a complement to the printed newspaper.

 
Tax Preference Performance Statement.
State law provides for a range of tax preferences that confer reduced tax liability upon a designated class of taxpayer.  Tax preferences include tax exclusions, deductions, exemptions, preferential tax rates, deferrals, and credits.  Currently, Washington has over 650 tax preferences, including a variety of sales and use tax exemptions.  Legislation that establishes or expands a tax preference must include a Tax Preference Performance Statement (TPPS) that identifies the public policy objective of the preference, as well as specific metrics that the Joint Legislative Audit and Review Committee (JLARC) can use to evaluate the effectiveness of the preference.  All new tax preferences automatically expire after 10 years unless an alternative expiration date is provided.

Beginning on January 1, 2024, the preferential B&O tax rate for newspaper printers and publishers of 0.35 percent is removed and a B&O exemption is created for all amounts received from activities related to printing or publishing a newspaper.  The exemption is extended to publishing eligible digital content for taxpayers who reported under the B&O printing and publishing tax classification for the tax reporting period that covers January 1, 2008, for a printed version of a publication.
 
The term "eligible digital content" is defined as:

• a publication that is published at regularly stated intervals of at least once per month;
• features written content, the largest category of which, determined by word count, contains material that identifies the author or the original source of the materials; and
• is made available to readers exclusively in an electronic format.

 
In cases where a publisher charges a single, non-variable amount to advertise in, subscribe to, or access content in both a printed and electronic publication, the entire amount of the charge is exempt.  The exemption applies only to persons primarily engaged in printing a newspaper, publishing a newspaper, or publishing eligible digital content, or any combination of these activities.
 
The B&O tax exemption expires January 1, 2034.  A TPPS is included that states a specific public policy objective of protecting and supporting local journalism.  The JLARC is required to review the B&O tax exemption.  If the review finds that exemption accomplishes its goal of supporting local journalism across the state, measured by retaining 75 percent of journalism jobs, local newspapers, and community focused online news outlets based in Washington as of December 31, 2022, or if a review finds the tax exemption enables locally based journalism outlets to continue to exist when compared to states that did not provide similar tax incentives, then a legislative presumption is created that the 2034 expiration date should be extended.