This bill establishes a sales and use tax exemption for critical access hospitals in Washington State, specifically for the purchase and use of medical equipment and supplies. Starting January 1, 2026, the tax imposed by RCW 82.08.020 will not apply to these sales, although the exemption will not cover construction materials, office equipment, building equipment, administrative supplies, or vehicles not used for patient transportation. The bill defines "critical access hospital" and outlines what constitutes "medical equipment" and "medical supplies." The exemption is set to expire on January 1, 2036.

Additionally, the bill includes a new section to chapter 82.12 RCW, which states that the use of medical equipment and supplies by critical access hospitals will also be exempt from use tax starting January 1, 2026, with the same definitions and conditions as outlined in the previous section. A tax preference performance statement is included to evaluate the effectiveness of this tax relief, with the intent to extend the exemption if the fiscal impact remains within a specified threshold. The legislature aims to alleviate the tax burden on these hospitals, particularly those located on islands.