As a REALTOR®, I am asking that you oppose the tax package including significant new and increased taxes on real estate proposed today by the House of Representatives.

The proposed 20% increase in the state B&O tax for service businesses only furthers the regressive nature of how our state taxes REALTORS®. While the proposal includes an increase in the small business tax credit, the structure of the state's small business B&O tax credit does not currently apply to REALTORS®. A REALTOR® earning $50,000 per year in commissions would pay the full 1.8% B&O rate the highest regular rate in the state's tax code.

While the Capital Gains proposal has been described as a tax only on the "1%," it would apply to far more than those families. A state capital gains tax would apply to average families during the one year in their lives when they sell a family cabin, rental, or investment property. As a REALTOR, I know that properties like these are sold to pay for life's basic needs - to pay for college, fund retirement, or deal with unexpected events like divorce or extraordinary health care costs. The people who would pay this new 5% are average families, not the "1%"

And while the budget announcement compares the Capital Gains proposal to the structure of capital gains structure in states like Mississippi, Alabama, and Utah this comparison is illogical. This is because neither Utah nor Mississippi impose any real estate excise tax on sales! The capital gains tax in those states is instead of, not in addition to, a real estate excise tax. Additionally, Alabama's real estate excise tax applies only to the gain not to the entire sales price like Washington State's real estate excise tax, which is among the highest in the Nation.

In Washington State, the real estate industry is just recovering from the recession, and homeowners have just now recovered the values lost during the last decade. We urge you to oppose real estate tax increases during the 2015 Legislature.

Sincerely,

Mike Gain

CEO / President

Berkshire Hathaway HomeServices Northwest Real Estate

4700 42nd Avenue SW, Suite 620

Seattle, WA 98116