(The Center Square) – Another successful Washington business owner is making potential plans to leave the state because of the cumulative tax burden, including passage of the state’s first income tax.
Chris and Riley Leier own Teeter, a Bonney Lake business that offers inversion, fitness, and recovery equipment for home.
“The business was really started by my dad after his own struggles with back pain. He was looking for a solution for himself,” said Riley Leier in a recent interview with The Center Square.
“It started in my family’s garage with my mother and uncle and grandpa, right here on Lake Tapps. And he drove around with product in his van, selling it until it slowly built into the company that we have today,” said Leier.
As the business began to grow, the couple who reside on Lake Tapps purchased a bigger distribution facility in Bonney Lake.
“We found a piece of land. It was 18 acres and eight minutes from our house. And so, we worked with the city to build this building, and we built another building. We’ve been developing that for the last 10 years and using our business development as an incubator for companies to come in and have a spot for their next journey, just like we did when we moved into our first building,” said Leier.
The couple shared that surviving the shutdowns of COVID, followed by tariffs and higher business taxes in Washington, have taken a toll.
“The fact that we’re still here is insane. We went from 60 staff down to 20. Salary cuts for ourselves. It’s been a real struggle holding on by our fingertips.”
Chris Leier said coming from Canada, he’s pretty much been a lifelong Democrat, as is his wife.
“I would say we don’t always vote directly on a party line. We look at it case by case and what the full story is. But for the most part, I think we sit more in that camp,” said Chris Leier.
The couple shared that Washington Democrats who pushed passage of the so-called “millionaires’ tax” seem to lack an understanding of how businesses like theirs will end up paying the tax.
“What happens in an S-corporation is very different than what happens on an individual basis,” Riley Leier said. “Everything flows through to us individuals and our tax return shows a profit that isn’t realized, right? That money’s tied up in inventory and in the business.”
“So, it may show that we made $2 million, but we have $350,000 in inventory sitting in our warehouse. So, the cash availability is not there to meet the demand that’s being pushed onto us.”
The couple told The Center Square they don’t want to leave the state because they have family here and love the Pacific Northwest, but may end up being forced to relocate.
“I’m not sure what we’re going to do,” said Chris Leier.
“We’ve been kicked in the teeth so many times,” said Riley Leier. “It’s hard to know what to do. I think for any business that is making it through from COVID to now times, there should be some support.”
“You want to see more stabilization of the economy, supporting the businesses is going to get us there, not beating us down and trying to scrape more away from us. There’s nothing else to get. We’ve literally been bled dry and there should be some grace,” Riley Leier said.
The Leier’s are among several business owners speaking out against the new income tax since Governor Bob Ferguson signed the measure into law in late March.
Prominent entrepreneurs who’ve spoken with TCS in recent weeks about their plans to leave the state include Bulwark Capital Management Principal and CIO Zach Abraham and Venice.ai Founder Jesse Proudman, who said the state’s new income tax is pushing him to set up residency elsewhere and look to relocate his business operations outside of Washington.
The 9.9% tax is applied to income above one million annually, or on combined household income above that threshold. Opponents are convinced the tax will be lowered to impact more Washingtonians in the years to come.
A lawsuit has been filed challenging the constitutionality of the new law, which is set to take effect in 2028.
Under the Washington State Constitution, a graduated personal income tax is unconstitutional because the state Supreme Court interprets “income” as “property,” and the constitution requires that all property taxes be uniform.
Supporters of the income tax hope the Washington Supreme Court will be willing to overturn nearly 100 years of precedence on the question.
Let’s Go Washington is also gathering signatures for an initiative effort they hope to get qualified for the November ballot, asking voters to repeal the income tax.
