WASHINGTON — A recent survey by the Association of Washington Business has shown a growing interest in relocating businesses and primary residences out of Washington state. The quarterly survey, which reviewed 400 businesses, highlighted a decline in economic confidence due to rising tax burdens and other cost pressures.
Last year, Washington imposed an additional 0.5% business and occupation tax on companies with more than $250 million in taxable income annually. New taxes were also imposed on large technology companies.
According to the survey, 44% of business leaders are considering moving their personal homes to states like Arizona, Idaho, Montana, or Wyoming. Employers considering relocating their businesses increased from 9% to 17%.
Kris Johnson, President of the Association of Washington Business, explained the survey’s findings. He said, “Some of the data coming back now has moved dramatically since the last time we’ve had a chance to have this conversation about what employers are thinking about relative to the economy, how the taxes are impacting them, and how tariffs are impacting them.”
The survey revealed that 56% of respondents rated Washington’s economy as moderate, while 28% described it as weak. Johnson noted, “The enthusiasm in the economy that we had at the beginning of 25 is gone. And it’s gone for a number of different reasons.”
When comparing the state economy to the national economy, 55% rated the U.S. economy as moderate, closely aligning with the state data. Johnson said, “Businesses are just trying to tread water through this political and economic uncertainty environment right now.”
This survey marked the first time respondents were asked about relocating their personal residences. Johnson found the results surprising. “44% of employers statewide contemplating moving their residence. That’s a big number,” he said.
The tax burden emerged as the primary driver for potential relocation. Johnson explained, “If you have an estate over a certain size, the state of Washington is going to collect 35% of your estate when you pass away.”
The survey also highlighted potential business relocations, with businesses considering moving to Idaho, Montana, Wyoming, Arizona, and Nevada. Johnson noted, “Last year at this time, that number percentage point was 9%. Today it’s 17%.”
Business confidence has declined since last year’s historic tax increase. Johnson said, “The impact of taxes, the impact of the state of tax, is impacting both business optimism, and it’s impacting the economy.”
Survey responses indicated uncertainty about whether Washington’s economy will enter a recession next year, with 45% unsure, 34% expecting a recession, and 21% not expecting one.
Johnson emphasized the need for economic growth plans, stating, “We need to stop the impacts on the economy. And we really need a plan to grow the economy.”
In Spokane County, the survey showed even higher relocation considerations, with 56% of businesses contemplating moving their residences and 35% considering relocating their businesses.
Johnson concluded, “We need to stop the pain that we have on the economy now, and we need to create a plan to grow the economy.”