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October 21, 2010 at 2:46 PM

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Texas governor uses I-1098 to court Washington business

Posted by Andrew Garber

This item has been updated.

Texas Gov. Rick Perry has sent letters to around 90 top employers and a few business associations in Washington urging companies worried about taxes to head on over to his state.

"As the State of Washington considers a multibillion-dollar tax increase for citizens and businesses ... I invite you to consider your future in America's new land of opportunity: the State of Texas," Perry wrote.

"If Washington doesn't want your business, Texas does. Texas has no personal income tax and no interest in getting one."

The letter was passed on to me by Bryan Mistele, the president and CEO of INRIX in Kirkland, who opposes I-1098, the proposal on the Nov. 2 ballot that would create an income tax for the state's wealthiest residents. Mistele said in an e-mail that he got a letter from Idaho as well awhile back, but no longer had a copy of that letter. Idaho sent out letters earlier in the year when the state Legislature was taking up tax increases.

I-1098 would create a 5 percent tax rate on annual taxable earnings exceeding $200,000 for individuals and $400,000 for couples, and a 9 percent tax rate on earnings of more than $500,000 for individuals and $1 million for couples.

It also would cut the state portion of everybody's property taxes by 20 percent and newly exempt 118,000 businesses from the business-and-occupation tax (B&O) on gross receipts by increasing the state credit to $4,800.

Ray Sullivan, Perry's chief of staff, said Texas is making a special effort to recruit Washington businesses because of I-1098.

"Gov. Perry is a big believer in states competing for jobs, and basing that competition on things like tax and regulatory environment and quality of life and quality of work force. Texas has won that competition in the last several years," Sullivan said.

I have a call out to Gov. Chris Gregoire's office for reaction.


Gregoire's office e-mailed this response.

"We're proud of Inrix and proud they call Washington home. I told them that when I visited their headquarters in May. We're serious about keeping businesses here and attracting new ones to the state. We've consistently ranked in the top five in the Forbes list of best states to do business--ahead of Texas."

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