The bill establishes a business and occupation tax deduction for payment card processing companies while simultaneously increasing the tax rate for their activities to 3.0 percent, based on gross income from merchant discounts. It introduces a new section to chapter 82.04 RCW, allowing these companies to deduct interchange and network fees from their taxable income. Key terms such as "interchange fee," "merchant bank," and "payment card processing company" are defined to create a clear taxation framework. Additionally, the bill modifies existing tax provisions to include the new payment card processing tax in calculations for additional taxes on specified financial institutions and adjusts the annual cap on combined surcharges for affiliated groups from nine million dollars to $9,000,000.

Moreover, the bill introduces a workforce education investment surcharge for businesses involved in advanced computing, with provisions for disclosures regarding affiliations within affiliated groups. A penalty of 50 percent of the total surcharge owed will be imposed on groups found to have intentionally evaded the surcharge. The bill clarifies definitions related to advanced computing and establishes a new revenue threshold for "select advanced computing businesses" at over $25 billion. Exemptions from the surcharge are provided for hospitals and certain provider clinics, with revenues directed to the workforce education investment account. The act is set to take effect on October 1, 2023, and includes retroactive application to open tax periods without provisions for refunds on overpaid taxes.

Statutes affected:
Original Bill: 82.04.290, 82.04.29004