OLYMPIA — In response to the conclusion of the 2025 legislative session, the Association of Washington Business, Bellevue Chamber of Commerce, Seattle Metropolitan Chamber of Commerce and Washington Roundtable today issued the following statement in strong opposition to the passage of the largest tax increase in Washington state history.

We are deeply disappointed by the legislature’s decision to approve nearly $9.4 billion in state and $3 billion local, for a total of over $12 billion in tax increases — an unprecedented move that comes at the worst possible time for working families and local employers.

As Washingtonians struggle with rising inflation, affordability challenges, and economic uncertainty, these massive tax hikes — as much as 400% in some sectors — will hit hard on small businesses and the communities they serve. Childcare providers, assisted living centers, repair shops, wholesale groceries, and other local retailers already operating on thin margins will now be faced with the choice to raise prices, cut jobs or close their doors.

“The legislators are voting on these tax increases, and can’t even tell us how big they are,” said Joe Fain, president and CEO of the Bellevue Chamber of Commerce. “Best estimates point to nearly $2,000 per year for a family of four. Every aspect of life in Washington is about to get more expensive. While some in the legislature might claim they are helping working families, they are actually doing irreparable harm.”

Steve Mullin, president of the Washington Roundtable, added: “Washington is ranked 47th in the nation for affordability – we are almost the worst state in the country for affordability. This is a crisis, and it is absurd for any legislator to suggest that the largest tax increase in state history is not going to make that affordability crisis even worse.”

“It’s just common sense – you can’t make things more affordable by making them more expensive,” said Kris Johnson, president and CEO of the Association of Washington Business. “These costs simply can’t be absorbed by businesses—they will be passed on to consumers in the form of higher prices for everyday goods and services.”

Rachel Smith, president and CEO at the Seattle Metropolitan Chamber of Commerce, cautioned that legislators should not follow Seattle’s lead when it comes to raising significant new business taxes: “The fact that the city of Seattle’s business tax revenues are down and falling – even before harmful economic actions from the federal government like tariffs – is a cautionary tale, but clearly not one being heeded in Olympia.”

Contrary to claims of a budget shortfall, state revenues are rising. The true challenge is not that taxes are too low, it’s that spending is too high – and simply unsustainable. State spending has doubled over the last decade, yet Washingtonians are not seeing meaningful improvements in public services like education, housing, or safety.

These extreme tax hikes send the wrong message to employers: grow your business, and you’ll literally pay for it. At a time when job creators need certainty and support, the state is punishing growth and innovation.

We urge lawmakers to reverse course and adopt a more fiscally responsible approach — one that prioritizes responsible spending, cuts waste, and focuses on long-term sustainability rather than pushing historic tax burdens onto families and small businesses.

Washington can and must do better.

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Press Release: Neighborhood businesses oppose state tax increases, project more closures and job impacts

OLYMPIA – Washington’s small & mid-sized businesses know tax proposals from lawmakers in Olympia will impact them, potentially leading to changes in business models, increases in customer prices – and even closures.

Since 2000, Washington has seen the greatest tax increases of any state in the nation, yet it still ranks 46th in public safety, and 47th in both affordability and fiscal stability. It already has the highest rate of new-business failures in the nation and has collapsed from the nation’s sixth best business tax climate in 2014 to the fifth worst.

“The inflationary financial climate affecting the restaurant industry has continuously put pressure on raw goods costs within our supply chain – especially on eggs and beef,” said Elaina Morris, CEO of Ascend Hospitality Group. “When the costs of raw goods and minimum wage labor increase, prices to our guests have to increase, which coupled with the effect of these proposed tax increases, will cripple our revenue. Guests will just stop coming. I am grateful to have kept the dream of owning my business alive through the COVID-19 pandemic, but I’m also still paying off loans I had to take during that time to keep my staff employed. Minimum wage increases each year add more unpredictability and unsustainability. At some point, it’s not going to be worth staying open.”

Together, the Association of Washington Business, Bellevue Chamber of Commerce, Seattle Metropolitan Chamber of Commerce, and Washington Roundtable are closely coordinating and urging lawmakers to address a projected $13+ billion state budget shortfall without raising taxes on Washington’s hometown businesses. The organizations are united with two-thirds of Washington voters who in a January survey agreed that raising taxes is a bad idea and could cost individuals and businesses billions per year, resulting in an even higher cost of living, a weaker economy and depressed job growth.

These four organizations and 60+ executives of Washington’s most-recognized companies and start-ups sent a letter April 2 to Gov. Bob Ferguson, Sen. Jamie Pedersen, Rep. Laurie Jinkins, Sen. John Braun and Rep. Drew Stokesbary urging the review and revision of the recent tax and budget proposals before enacting them into law this year. Over the past decade the state operating budget has more than doubled, with a 37% increase in just the last four years – far exceeding state increases in population, inflation, and personal income, threatening our economic stability.

The state’s budget deficit is not due to a recession, as it was in 2009; it is also not due to declining revenues. It is because spending has eclipsed growing revenues and lawmakers spent the rainy-day fund and one-time monies and assumed more revenue than was forecast. Both Senate and House majority caucuses have recently rolled out tax proposals they hope to pass before sine die on April 27.

Officials have proposed new taxes that would generate between $13 billion and $17 billion dollars for the state – representing by far the largest tax increases in state history and making everything from groceries to housing more expensive for all Washingtonians.

Some supporters of these proposals say the taxes will only impact big businesses or the very wealthy, but they are wrong. The Seattle Metro Chamber pulled together a list of tax proposals and details the business types, and consumers, who will feel the pain of cost increases.

In response to recent tax proposals, organizational leaders said:

“Washington doesn’t need record-breaking business tax hikes—we need smart fiscal choices. Small businesses are working hard to grow, hire, and serve their communities. Lawmakers should be making that easier, not harder. There’s still time to course-correct and build a budget that supports a thriving economy and strong communities.” – Steve Mullin, president, Washington Roundtable

“We can’t make the state more affordable by making it more expensive for employers. It’s time to support a pro-growth agenda. That means growing the tax base and not the tax rate.” – Kris Johnson, president and CEO, Association of Washington Business

“Washington, we have a problem: Too many of our small businesses are not healthy, and we’ve got to do something about it – all of us. You’ve read about it in the news. You’ve seen the closure notices. You’ve seen boarded-up storefronts. While it’s not new news that the pandemic, inflation, tariffs, and waves of supply chain and hiring challenges are major contributors, when it comes to government, public officials are making policy choices that are having consequences – and those are piling up. We are hearing about it regularly from members, especially our smallest businesses.” – Rachel Smith, president and CEO, Seattle Metropolitan Chamber of Commerce

“Revenue is up over 6%. That’s billions of dollars more than the state had last biennium. This ‘crisis’ is a result of using budgeting gimmicks to artificially inflate spending beyond what the state can afford. When legislators create new programs or expand eligibility for existing ones, they often delay when the law goes into effect. Or, when they bank future revenues well above what experts project, this puts future budgets out of whack. Then, legislators act surprised when they start the session deep in the red. Washington’s strong economic growth has masked these broken budgeting practices in the past, but these tax proposals will put an end to that growth and hurt vulnerable Washingtonians the most.” – Joe Fain, president and CEO, Bellevue Chamber

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About the Seattle Metropolitan Chamber of Commerce

The Seattle Metropolitan (Seattle Metro) Chamber of Commerce is the regional business advocacy organization that engages the innovation and entrepreneurship of its 2,500 members to promote inclusive economic prosperity. Founded in 1882 by local business leaders, the Chamber today is an independent organization representing a regional workforce of approximately 750,000. For more information, visit www.seattlechamber.com.

About Washington Roundtable
Washington Roundtable is a nonprofit organization comprised of senior executives of major private sector employers in Washington state. Roundtable members work together to effect positive change on public policy issues that they believe are most important to supporting state economic vitality and fostering opportunity for all Washingtonians. For more information, visit waroundtable.com.

About the Association of Washington Business
Formed in 1904, the Association of Washington Business is Washington’s oldest and largest statewide business association representing all sectors of business. AWB serves as both the state’s chamber of commerce and the manufacturers association. While its membership includes major employers like Boeing and Microsoft, 90% of AWB members employ fewer than 100 people. More than half of AWB’s members employ fewer than 10. For more about AWB, visit www.awb.org.

About the Bellevue Chamber
With hundreds of members representing tens of thousands of employees, the Bellevue Chamber is the relationship, policy, and business development hub for organizations throughout the Puget Sound region. We connect businesses with potential employees, sales opportunities, and social engagement, and provide our members access to industry experts and real-time information impacting our city and the Eastside. Learn more at bellevuechamber.org.