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Act Now to Oppose B&O Tax Increase

The Governor’s budget includes a whopping 66% increase in B&O taxes in the service category, from 1.5% to 2.5%. The increase could begin as early as July 1, 2019, the start of the new budget cycle. This increase would impact DPMs who currently pay B&O. Even if you work as an employee within a non-hospital based health care setting, it will impact your employer’s bottom line, which in turn will impact you. Hospitals are exempt from this increase.

The B&O tax increase is our state’s most regressive tax because it is based on gross receipts. Podiatric physicians and other health care providers in private practice pay B&O taxes in the service category. With overhead costs routinely at 50%+ for private practices, increasing the B&O tax exacerbates the impact of this regressive tax. It is important for legislators to understand that providers in private practice are facing shrinking bottom lines as narrower networks combine with increased demands for costly technology improvements such as electronic medical records and integration with the prescription monitoring program. The bottom line is that providers have no way to pass along any cost increases to patients.

WSPMA knows that many health care provider associations, as well as the entire business community will oppose this tax increase. It’s important for WSPMA members to do your part in stopping this tax increase, and that’s why WSPMA is asking for your help. The most powerful relationship in our democracy is between legislators and their constituents. WSPMA is requesting that you contact your legislators, and ask that they oppose any increase in B&O taxes. If you’re uncertain who your legislators are (two Representatives and one Senator), search your address to find which district you’re in.

The most effective way to communicate with your legislators is via email. Legislators’ emails are almost always the first name and last name, divided by a period, @leg.wa.gov. So, for example: [email protected] You can either email your legislators directly through this method or if you enter your address in the link noted in the previous paragraph, you’ll be directed to your three legislators. If you click on the name of the legislator you want to email, there will be an email option. It’s a little more cumbersome, but it works.

            The following is a suggested message, although feel free to personalize it, while always remaining respectful.

“My name is (insert your name here), and I am a podiatric physician living in the (insert your district number here) district. Please oppose any increase in the B&O tax rate in the service category.”

Noting that WSPMA has members who work in private practice, as well as within larger health care systems—two options for the next part.

Private practice DPM: “Health care providers in private practice pay B&O taxes at the 1.5% level on gross receipts. With overhead costs, routinely at 50%+ for private practices, increasing the B&O tax further exacerbates the impact of this unfair regressive tax. It is important to note that providers in private practice are facing shrinking bottom lines as narrower networks combine with increased demands for costly technology improvements such as electronic medical records and integrating with the prescription monitoring program. The bottom line is that providers have no way to pass along any cost increases to patients.”

Employed DPM in non-hospital based larger health care systems (Remember, this B&O tax increase would not impact hospitals): “The proposed B&O tax increase would place an enormous strain on multi-specialty practice settings to remain economically viable and competitive in today’s health care marketplace. Please consider that in excess of 50% of revenue goes to overhead, and meeting ever increasing requirements of the health care delivery system to include electronic health records and integration with the prescription monitoring program. With no way to shift costs, this increase will result in a loss of jobs, since health care delivery systems have very tight margins.”

Final sentence for both private practice and employee: “As a legislator, I know you face many challenges in determining how to fully fund the 2019–21 biennial budget. However, relying more heavily on a tax that is this state’s most regressive tax is not the right route. Please say “no” to any increases in the B&O tax.