McCoy: Active-duty business owners deserve a break on late taxes

House passes bill that ‘does the right thing’

February 15, 2008

OLYMPIA – A proposal cutting some tax-slack for business owners on active military duty during a war won unanimous approval today (Feb. 15, 2008) in the state House of Representatives.

State Rep. John McCoy, D-Tulalip, one of the co-sponsors for the legislation, said the plan “does the right thing for men and women who own a business and who are making uncommon sacrifices for our country.

“If they are late in paying their excise taxes while they’re fighting a war for our nation,” McCoy said, “this proposal just stands to moral reason: These citizens should not be stuck with paying interest and penalties on the delinquent excise taxes.”

Current Washington law assesses a penalty for late payments.

The bipartisan legislation (House Bill 3283) directs that penalties and interest for any late state excise tax must not be charged against a business if the majority owner is in the armed forces, and he or she is on active duty in an armed conflict outside the United States.

McCoy said the waiver is limited to two years.

Further, the waiver can be used only by the majority owners of businesses whose gross income was under $1 million in the year before the majority business owner’s active-duty military service.

Since a similar waiver of penalties is provided for the late property taxes owed by military personnel, “we should make the same allowance for the business folks,” McCoy said.

The Snohomish County legislator noted that he heard of one instance where the business owner who was on active duty had left his accountant in charge of the business operations – “and then the accountant was also called up to active duty!

“So in that case neither the business owner nor the accountant was on hand to make the state excise-tax payments on time – because these two people were defending our country!

“It’s just flat wrong that the business would be dinged for the late taxes that wouldn’t have been late if the people in charge weren’t putting their lives on the line for the state of Washington,” McCoy said, “and if they weren’t putting their lives on the line for the United States of America whose armed forces called them up to serve!”