OLYMPIA, Wash. – A bipartisan panel considering how to improve Washington state’s tax structure has some recommendations for businesses and local governments.

The Tax Structure Work Group has been studying the state’s taxation and taking public input for four years.

One of their conclusions is that the business and occupation tax should be replaced with a margin tax.

The B&O tax is levied on a business’s gross receipts and studies have found it disadvantages small, low margin and start-up companies.

A margin tax would still tax gross receipts but would allow businesses to use one of four deductions.

Another of the work group’s conclusions is to allow local governments more flexibility in property tax rates.

Current law limits them to 1% annual increases.

The work group says that should be adjusted to allow them to compensate for inflation and population growth.