Columbia Bank, which has more than 100 branches around Washington, says new state taxes were a major factor behind its plans for a corporate expansion in Arizona.
The bank's 13,500-square-foot office, near Scottsdale, will open by the end of October and house many of the bank's executives, a bank spokesperson said Tuesday.
It currently has corporate offices on several floors of a Tacoma building off Interstate 705.
Columbia's Arizona expansion adds fuel to a heated debate about whether Washington's taxes and regulations are driving employers to locate in other states.
The bank already has a retail and corporate presence in Arizona. That includes CEO Clint Stein, who recently sold his home in Auburn and has been an Arizona resident since May, according to media accounts.
The latest expansion was spurred by last year's increases in Washington's business and occupation tax, which the bank estimates would add $8 million a year in expenses, a bank spokesperson said Tuesday.
Columbia Bank will keep its corporate offices in Tacoma while the company's Arizona operations ramp up, officials confirmed.
In published interviews, Stein has said that Columbia, which has around 350 banking locations across the Western U.S., could shift more operations out of Washington, including to Arizona.
It's based on where our executives spend the majority of their time, which going forward is less and less in Tacoma," Stein told the Puget Sound Business Journal.
Although Columbia will "always have a presence in that building,” Stein said, "there’s probably not a need for an executive suite long-term, so we’ll sublease that or not renew the lease at the appropriate time,” according to a Monday report in the Phoenix Business Journal.
Stein told the Puget Sound Business Journal that if Washington legislators were to approve a new statewide payroll tax, the bank would reassess its remaining corporate footprint in Washington. State lawmakers have looked in recent years at the possibility of a payroll tax similar to Seattle's JumpStart tax.
"We would move non-customer-facing administrative roles subject to the tax to other states, principally Idaho and Arizona," he told the Puget Sound Business Journal.
Stein's comments echo concerns by other Washington businesses that state and local taxes are causing employers to look outside the state.
This spring, Starbucks confirmed plans for a 2,000-person operation in a 250,000-square-foot office building in Nashville, Tenn.
Starbucks said the move was meant to access Nashville's skilled workforce and support retail expansion, but company insiders said Tennessee's lower business taxes were also a major factor.
Meanwhile, Washington-based Janicki Industries, which manufactures various tools and parts, announced plans earlier this year for an $800 million expansion in Montana. Janicki'spresident said at the time that Washington state policies were creating challenges for the company and its employees.
Columbia's current and planned corporate operations in Arizona could grow to up to 50 employees.
Taxes aren't the only spur. Even without a statewide payroll tax, "we could see our Washington headcount continue to decline as we have had employees requesting relocation for affordability and other family considerations, Stein said, according to the Phoenix Business Journal.
Columbia Bank reported around $65.4 billion in total assets this year, according to federal filings. It has locations in Washington, Oregon, California, Idaho, Colorado, Arizona, Nevada and Utah.
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