The bill seeks to clarify the excise tax treatment for title and escrow businesses regarding amounts they receive from clients for remittance to county filing offices for document recording. It addresses recent assessments by the Department of Revenue that imposed sales and use and business and occupation taxes on recording surcharges, which have created financial burdens for small independent companies. In light of a recent court ruling classifying Washington's document recording surcharge as an excise tax, the legislature aims to ensure that these taxes are not applied to the surcharge.

To implement this clarification, the bill amends RCW 82.04.050, defining "sale at retail" or "retail sale," and introduces new provisions that exempt escrow agent services from taxation on amounts remitted for document recording, provided these amounts are separately identified on settlement statements. Additionally, the bill adds a new section to chapter 82.04 RCW, specifying that remittance amounts for document recording are exempt from the chapter's application for those primarily engaged in escrow services. It also clarifies that certain existing regulations do not apply to this act and establishes an effective date of January 1, 2026.