Maritime Interests Worry About Tax Proposals

By John Talton, April 18, 2013, Seattle Times

Olympia pays a good deal of attention to lobbyists from Boeing and Microsoft, which is understandable. It’s an open debate whether the tax breaks and incentives for aerospace and technology provide more revenue through job creation and retention than they cost. But do the governor and lawmakers want to take chances in today’s competitive climate? Another important economic (forgive my jargon sin) ecosystem isn’t feeling as much love: Maritime.

A letter was sent to Gov. Jay Inslee earlier this month signed by Eric Johnson, executive director of the Washington Public Ports Commission; John Stuhlmiller, chief executive of the Washington Farm Bureau; Dan McKisson, president of the Puget Sound District Council of the International Longshore and Warehouse Union, and Capt. Michael Moore, vice president of the Pacific Merchant Shipping Association. In it, they express worry that increases in the B&O tax will put Puget Sound ports — and Washington trade — at an even greater disadvantage to rivals. Some of those competing ports benefit from significant incentives and tax breaks.

Among the concerns: A 140-percent proposed increase in the B&O tax on stevedoring (loading and unloading cargo from ships). The letter warns:

Stevedoring companies in (Washington) are struggling to keep the container ports in Seattle and Tacoma competitive to attract cargo. While other West Coast ports, including those in Canada and Mexico, have seen significant increases in their container volumes, the Ports of Seattle and Tacoma have seen those volumes fall. Maintaining the current B&O tax rate on stevedoring alone will not guarantee port competitiveness, but increasing the tax will increase costs for our ports and risk a further decline in cargo volumes, export capacity and waterfront jobs.

Other concerns are a proposed 1.8 percent B&O tax on commercial lease payments and narrowing the tax exemption on import commerce. The former issue, the groups worry, could squeeze revenues from such entities as terminal operators, thus hurting port revenue and their ability to invest in infrastructure, or drive the lessors away entirely. The latter especially worries agricultural interests. One of out biggest exports is air: Containers leave Puget Sound ports empty bound for Asia. Agricultural interests worry that tinkering with the import tax exemption might discourage shipping lines from filling those containers with Washington farm products, even though they provide low revenue for the shippers.

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