Today’s suggested exemptions to ax and sins to tax:

$92.9 million | Implement Governor Gregoire’s proposals for limiting tax exemptions:

• B&O exemption for out-of-state businesses with “economic nexus”: Washington now taxes companies with a physical presence in the state – this change would broaden that definition to include those with a significant economic presence. | $73.1 million

• Loopholes and tax avoidance: This change would impose a use tax on tangible personal property acquired through a series of transactions designed to avoid tax, and clarify who is responsible for paying Real Estate Excise Tax in certain circumstances. | $11.6 million

• Limit B&O preference for processing meat, fruit & vegetables. | $4.1 million

• Clarify taxation of corporate board of directors’ fees. | $2.1 million

• Sales tax and B&O exemptions on bullion: Sales of precious metals and bullion have been exempt from B&O since 1985, because sellers argued they were in competition with other states. The Streamlined Sales Tax Agreement now makes tax avoidance by purchasing elsewhere less likely. | $1.9 million

• Sales tax for cattle operations in livestock nutrient management: Livestock feeding operations are regulated by state and federal governments to prevent water and other pollution. This tax exemption passed after changes in those laws; farmers have now had adequate time to make the transition. | $0.12 million

$225 million | Increase Hazardous Substance Tax from 0.7% to 2% of wholesale value. This tax, passed by voter initiative in 1989, applies to first possession of petroleum, pesticides, and certain chemicals – over 8,000 substances which Department of Ecology has determined to cause a threat to human health or the environment. Receipts are currently dedicated to cleanup of hazardous waste sites and grants to local governments for hazardous waste programs.

Total value of this Ax It or Tax It package: $317.9 million.

Total value of all Ax It or Tax It packages to date: $1.37 billion.

Economically speaking, Washington has been hit by a “perfect storm”: Plummeting tax receipts brought on by the national recession are now slamming our state’s rickety and outdated tax system. Last year, lawmakers cut $3.4 billion from the state budget. This year, we face a projected $2.6 billion shortfall.

“Ax It or Tax It” offers budget solutions that will both balance the state budget this year and provide long-term budget stability in the years ahead. By closing tax exemptions that no longer serve a compelling public purpose and carefully choosing new sources of revenue, lawmakers can stabilize funding for quality schools, affordable health care, a safety net for the most vulnerable, affordable housing, public safety, and a clean environment.

You can read previous editions of “Ax It or Tax It” here.