On City/Inside Out, state House Speaker Frank Chopp (D-Wallingford) says that closing “tax loopholes” will be the first place that legislators look for new revenue to help with Washington state’s $2.6 billion deficit. Chopp tells host C.R. Douglas, “We’re working closely with the senate and the governor’s office so you’ll see some ideas coming out in the first two weeks of the session.”

Chopp names one $150-million tax incentive in particular that he wants to see rescinded—the so-called “Dot Foods loophole.” In 1983, the state Legislature created a tax exemption for out-of-state food companies that use an agent to sell directly to wholesalers in Washington. In 2000, the state Department of Revenue began interpreting this law to mean that companies, including Dot Foods of Illinois, could not receive the tax exemption if they sold any products to wholesalers that ended up in retail stores. Dot Foods sued and the state Supreme Court ruled in the corporation’s favor. Chopp says that the decision opened up an unexpected $150-million hole in the state budget. He adds, “So we’ll close that loophole and make sure we do it in a way that complies with state law and the Supreme Court decision.”