Life insurance sales employees

From the 2024 DOR Tax Exemption Study

82.04.360(1) - Life insurance sales employees Description Full-time life insurance sales agents are exempt from B&O tax on their income. Purpose The federal government treats life insurance sales agents as independent contractors. Washington treats them as employees. Other employees are exempt from B&O tax, so this exemption treats life insurance agents the same as other employees. Taxpayer ($ in millions): savings FY 2024 FY 2025 FY 2026 FY 2027 State Taxes $0.982 $1.018 $1.052 $1.086 Local Taxes $0.000 $0.000 $0.000 $0.000 Repeal of Repealing this exemption would increase revenues. exemption Potential ($ in millions): revenue gains FY 2024 FY 2025 FY 2026 FY 2027 from full repeal State Taxes $0.000 $0.840 $0.999 $1.032 Local Taxes $0.000 $0.000 $0.000 $0.000 Assumptions - This repeal takes effect July 1, 2024, and impacts 11 months of collections in fiscal year 2025. - Growth rate mirrors the B&O growth rate reflected in the Economic and Revenue Forecast Council's March 2023 forecast. - Compliance will be as follows: - 90% compliance for fiscal year 2025. - 95% compliance for all fiscal years thereafter. Data Sources - Economic and Revenue Forecast Council, March 2023 forecast -