The bill seeks to clarify the excise tax treatment for title and escrow businesses regarding amounts they receive for remittance to county filing offices for document recording. It addresses recent assessments by the Department of Revenue that have imposed sales and use taxes on recording surcharges, which the legislature recognizes as a financial burden, especially for small independent businesses. To alleviate this issue, the bill establishes a clear policy that these surcharges should not be subject to sales and use taxes or business and occupation taxes, following a recent court ruling that classified them as excise taxes.

To implement this policy, the bill amends RCW 82.04.050, introducing new provisions that exclude amounts remitted for document recording from being classified as taxable sales when separately identified on settlement statements. It also clarifies that services provided by escrow agents do not include these remittance amounts, thereby protecting businesses from unexpected tax liabilities. Additionally, the bill exempts these remittance amounts from chapter 82.04 RCW for those primarily engaged in escrow services, with a clear identification requirement on settlement documents. The bill sets an effective date of January 1, 2026, and specifies that certain existing regulations do not apply to this act.