(The Center Square) – When you own a small business in Washington’s ever-changing climate of tax and regulation policy changes, operators get used to being creative to remain afloat. But for some business owners, the coming income tax law brings the greatest concern to date.
That’s the worry for Curt Nuccitelli who owns Spirit Transport Systems in the Kent Valley.
Nuccitelli’s 14-employee trucking company moves goods through the ports of Seattle and Tacoma, specializing in intermodal trucking, drayage, flatbed transport, heavy cargo, transloading, warehousing, and storage.
He’s coming off a couple of lean years and offered The Center Square a tour of his property Thursday, where about 30 chassis were parked out back.
“The reality is the fact that you see all of them sitting here means we’re not that busy because they should be under containers sitting in warehouses somewhere, so this is another lean year after the last couple we’ve had,” Nuccitelli said.
He said if the income tax comes into play, he won’t be able to carry any business losses from rough years forward into the next year.
“That would be a huge hit for us,” he said.”
Nuccitelli told The Center Square he’s never really involved himself in politics, but when he learned during the legislative session that lawmakers were pushing the so-called millionaire’s tax, he started paying attention.
“Once I understood it was going against the Washington State Constitution, that was the primary reason that kind of piqued my interest in understanding what was going on,” Nuccitelli said. “And then also the narrative out there, just calling it a millionaire’s tax and kind of pulling on heartstrings….I didn’t like that.”
Nuccitelli shared that his mindset even a decade ago was to be a guy who would jump on board and say “make sure the rich are paying their fair share.
“But the reality is this would impact small businesses like me, and this would impact my family and my ability to take care of my employees,” he said.
Because his company’s profits are taxed as personal income, Nuccitelli could end up paying the millionaire’s tax, which then impacts his ability to scale-up hiring and could mean he won’t be able to provide raises for his workers, whom he calls “family.”
He shared that he recently paid $100,000 to repair a sewer pipe in his facility’s parking lot. He said the break wasn’t their doing, but the city made him pay.
“This state is not a very business friendly environment,” he said. “The taxes that we pay, B&O taxes, Department of Revenue taxes, payroll taxes, property taxes, personal property taxes. It’s all so much and this income tax would be a huge hit.”
As a small business owner, he said relationships with his employees and their families are close and he wants to keep the good people he has by keeping his doors open.
“I don’t need my employees struggling to make ends meet,” he said. “They should be able to make a livable wage working for me. Where they don’t have to have that added stress of not being able to pay their bills. So, for me, to have the ability to increase their salaries, to have a more robust benefit package and other perks that come along with working for Spirit Transport. One of the main foundations when I opened this company was to treat my people well.”
Nuccitelli is one of several plaintiffs in a lawsuit filed by the Citizen Action Defense Fund, led by Jackson Maynard, along with former Washington Attorney General Rob McKenna and former Washington Supreme Court Justice Phil Talmadge.
The National Federation of Independent Business (NFIB) has also joined the suit, along with the Building Industry Association of Washington (BIAW).
The challenge centers on a long-standing interpretation in Washington that treats income as property, meaning taxes must be uniform and capped at 1%. The new law imposes a 9.9% tax on income above $1 million, or combined household income above $1 million, which plaintiffs say breaks those rules.
The tax is scheduled to take effect in 2028, though its future now depends on the outcome of the legal challenge filed in Klickitat County.
Let’s Go Washington and founder Brian Heywood have also challenged the Washington Secretary of State denial of their referendum attempt. The Washington State Supreme Court will take up the matter on Apr. 30.
