Professional employer organization wages

From the 2024 DOR Tax Exemption Study

82.04.43393 - Paymaster Services for Affiliates Description A paymaster providing payroll and related human resources services to an affiliate may deduct from the measure of B&O tax amounts received to cover the employee costs of a qualified employee. Employee costs include wages and salaries, workers’ compensation, payroll taxes, withholding, or other assessments paid to or on the behalf of an employee. Purpose Ensures affiliated businesses do not incur additional tax burden when streamlining the payroll process. Taxpayer ($ in millions): savings FY 2024 FY 2025 FY 2026 FY 2027 State Taxes $1.460 $1.500 $1.540 $1.590 Local Taxes $0.000 $0.000 $0.000 $0.000 Repeal of Repealing this deduction would increase revenues. However, a paymaster could exemption restructure and deduct employee costs as advances or reimbursements (WAC 458- 20-111). Potential ($ in millions): revenue gains FY 2024 FY 2025 FY 2026 FY 2027 from full repeal State Taxes $0.000 $1.370 $1.540 $1.590 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 real income growth rate reflected in the Ec