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January 28, 2019

Do not increase B&O tax on physician services

During the 2019 state legislative session, the WSMA is opposing efforts to increase taxes on physicians or their services, which would decrease access to care.


The governor's budget proposal included an increase in the business and occupation (B&O) service tax from 1.5 to 2.5 percent—a 67 percent increase. If included by the Legislature in the final budget agreement, the resulting financial burden will be unsustainable for many private practices, many of which run on tight margins, leading to job losses and severely impairing the ability of practices to invest in innovations that improve patient safety and patient care.

The WSMA opposes taxes on physicians—including increasing the business and occupation (B&O) tax, which will be costly to both physicians and to patient care. We also oppose taxing physicians and other health care providers to subsidize the operations of another industry.

Why it matters

Increasing taxes on physicians, other care providers and their services can:

  • Limit access to care, as many physicians will stop seeing Medicaid patients in order to stay viable.
  • Disproportionately harm individuals in private practice and independent medical clinics—about half of our state’s physicians.
  • Result in job losses, since many physician practices run on extremely tight margins.
  • Impact the ability of practices to invest in innovations.
  • Put a financial strain on practices’ ability to remain economically viable and competitive.
  • Contribute to an unfriendly economic environment, making it difficult to attract new and retain existing physicians to meet expanding health care demands.

An economic environment that encourages growth in our physician workforce has the added benefit of increasing the economic activity generated by physicians and improving the health of the local economy.*

*Washington’s physicians generate $37.1 billion in total economic activity (8.3 percent of gross state product), supporting 198,336 total jobs (direct and indirect) and 81,583 direct jobs, according to the 2018 AMA Economic Impact Study.

Call to action

Oppose taxes on physicians or their services, which would decrease access to care.

More information

Kathryn Kolan, JD

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