Constitutional deductions

From the 2024 DOR Tax Exemption Study

82.04.4286 - Constitutional deductions Description The Washington and U.S. Constitutions prohibit the taxation of certain activities. Amounts received from these activities are deductible from gross income when computing B&O tax. This includes, but is not limited to: - Sales of tangible personal property received by the purchaser in another state. - Sales by businesses that do not have substantial nexus with Washington. - Sales of tangible personal property in export commerce to foreign countries. - Sales by Indian tribes or tribal members in Indian country. Purpose To avoid violating state and federal laws. Taxpayer ($ in millions): savings FY 2024 FY 2025 FY 2026 FY 2027 State Taxes $1,676.000 $1,745.000 $1,816.000 $1,892.000 Local Taxes $0.000 $0.000 $0.000 $0.000 Repeal of Repealing this deduction would not increase revenues as the U.S. and Washington exemption Constitutions prohibit the taxation of certain activities. Potential ($ in millions): revenue gains FY 2024 FY 2025 FY 2026 FY 2027 from full repeal State Taxes $0.000 $0.000 $0.000 $0.000 Local Taxes $0.000 $0.000 $0.000 $0.000 Assumptions - No revenue would be collected if this deduction was repealed. - Growth rate mir