(The Center Square) – Microsoft and Amazon are among the wealthiest companies in the world, each with a market capitalization of well over $2 trillion, but a bill out of Washington could trim off some cash to save the state’s finances.

The Legislature levies various taxes on businesses operating within its borders. One of the most common is a business and occupation, or B&O, tax. The state requires some companies, including major tech firms, to pay more, but the higher rate also comes with a cap.

Those with worldwide gross revenue of more than $25 billion pay an extra 1.22% advanced computing surcharge capped at $9 million annually. However, with the state needing to balance a $12 billion to $16 billion revenue shortfall in only a matter of months, that cap could disappear.

State lawmakers heard testimony on Tuesday over a bill to do precisely that. If approved, House Bill 1839 could generate more than $1 billion through 2031. However, concerns remain over some leaving the state to avoid the tax, similar to Amazon CEO Jeff Bezos’s relatively recent move from Washington to Florida, which does not have a capital gains tax. Three years ago, Washington introduced a new 7% capital gains tax on sales of stocks or bonds of more than $250,000.

“We’re expected to produce 35,000 fewer trained workers than will be needed in the computing and technology sector alone [through 2032],” Rep. Julia Reed, D-Seattle, told the House Finance Committee Tuesday. “The intent of this bill is to generate revenue to close that gap.”

Washington created its Workforce Education and Investment Account in 2019 to provide college grants and other higher-education programs. The surcharge currently goes to that account, but the $9 million annual cap limits its impact as workforce costs contribute to the state’s shortfall.

According to the Office of Financial Management, inflation, expanded programs and workforce costs caused the multibillion-dollar shortfall. The Legislature could balance it with significant cuts but at the expense of what some view as essential and potentially the future workforce.

The Office of Program Research, made up of nonpartisan staff for the Washington State House of Representatives, has estimated a budget shortfall of $6.7 billion for the 2027-2029 biennium.

Washington Roundtable projects the state’s workforce to expand by 12.8% through 2032, while national job growth sits at 2.8%. If approved, HB 1839 would expand access to the college grant program, teacher training programs and incentives to study in-state.

Reed said Washington has one of the nation’s most generous college aid programs, which led opponents to question why the taxpayer should have to “shoulder more burden.” Reed noted declining enrollment trends that may constitute further investment despite existing efforts.

“People who have wealth have a great deal of mobility,” Rep. Cyndy Jacobsen, R-Puyallup, said regarding another tax bill before the committee on Tuesday. “Are you concerned about that?”

Rose Feliciano testified in opposition to HB 1839 on behalf of TechNet and said the companies paying into the account agreed to do so when the state created it years ago. However, Feliciano claimed none of the employers were consulted on this proposal ahead of time.

LIST: THE EXECUTIVE ORDERS, ACTIONS, AND PROCLAMATIONS TRUMP HAS MADE AS PRESIDENT

Many tech companies have recently experienced mass layoffs, so Feliciano worries about the message that HB 1839 would send. Several student groups and others took another approach, testifying in support of HB 1839 while arguing that the existing surcharge has helped many afford school.

“Amazon’s [gross] profits totaled $311 billion in 2024, Microsoft’s were $171 billion,” John Burbank, former executive director of the Economic Opportunity Institute, testified. “Our students lose $200 million a year from this loophole. Please close this loophole now without amendment.”