The City of Lynnwood does not levy a B&O tax.  State law permits a tax of up to .2% on business activity with specific exceptions.  It is estimated that a .2% B&O tax would result in revenues of more than $3 million annually.

The B&O tax is unpopular with the business community, as it makes no provision for profitability of the business.  State law specifically directs that the tax not be passed on to consumers (directly).  As a result, the tax is imposed in 35 of the 288 cities in Washington State.  A B&O tax will not be proposed for the year 2001 budget.

State law enables cities to levy utility taxes on natural gas, telephone and electricity in an amount up to six percent (6%) of the total charges.  A tax is also permitted on solid waste, water, sanitary sewer and storm sewer.  No rate limitation exists on this second category of utilities.

The City of Lynnwood does not impose a utility tax.  It is anticipated that a 6% tax on the natural gas, telephone and electricity utilities would result in approximately $1.7 million annually.  In addition, a 6% utility tax on solid waste, water, sanitary sewer and storm sewer utilities would result in approximately $470,000 in revenues.  No utility tax is proposed for the FY2001 budget.