The bill seeks to amend the capital gains tax regulations under chapter 82.87 RCW by closing existing loopholes and introducing a capital gains tax credit in place of the business and occupation tax credit. Key provisions include the establishment of a nonrefundable credit against taxes due on sales or exchanges subject to the business and occupation tax, effective from tax year 2025. The bill also introduces a late payment penalty waiver, modifies the publication schedule for inflation adjustments, and changes the distribution of funds to the following fiscal year. Additionally, it aims to treat spouses and domestic partners consistently in tax matters and introduces new definitions relevant to capital gains taxation.

Significant amendments include the expiration of certain provisions on January 1, 2026, and the establishment of a process for transferring funds from the general fund to the education legacy trust account based on capital gains tax reductions. The bill clarifies the definition of "qualified family-owned small businesses" and outlines the tax deduction process for charitable donations, specifying a minimum threshold and cap. It also revises penalties for late filings and establishes conditions for waiving these penalties. Furthermore, the bill modifies the treatment of spouses and domestic partners for tax purposes, ensuring their activities and assets are combined for tax calculations, and introduces new requirements for brokers regarding the electronic submission of IRS Form 1099-B.

Statutes affected:
Original Bill: 82.04.4497, 82.87.020, 82.87.060, 82.87.070, 82.87.080, 82.87.100, 82.87.110, 82.87.120, 82.87.150, 82.08.0206, 82.32.090
Substitute Bill: 82.04.4497, 82.87.020, 82.87.060, 82.87.070, 82.87.080, 82.87.100, 82.87.110, 82.87.120, 82.87.150, 82.08.0206, 82.32.090