The bill seeks to amend the capital gains tax framework under chapter 82.87 RCW by closing existing loopholes, replacing the business and occupation tax credit with a capital gains tax credit, and clarifying ambiguities in the current law. Key provisions include the introduction of a nonrefundable credit against taxes due for sales or exchanges subject to both the business and occupation tax and capital gains tax, effective from tax year 2025. The bill also establishes a late payment penalty waiver, modifies the publication schedule for inflation adjustments, and alters the distribution of funds to the following fiscal year. Additionally, it treats spouses and domestic partners more consistently and introduces new definitions relevant to the capital gains tax, while ensuring that certain provisions will expire on January 1, 2026, without affecting existing rights and liabilities.

Further amendments clarify the treatment of spouses and state-registered domestic partners for tax purposes, ensuring they are not considered separate taxpayers. The bill also revises tax deduction provisions for charitable donations, specifying a minimum threshold and cap for deductions, and outlines requirements for filing tax returns, including penalties for late filings. It introduces new compliance requirements for electronic filing and payment, along with penalties for non-compliance, while mandating brokers and barter exchanges to electronically submit IRS Form 1099-B for long-term capital asset transactions. The new provisions will take effect on January 1, 2026, and the bill includes a clause stating it will be null and void if specific funding is not provided by June 30, 2025.

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
Bill as Passed Legislature: 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
Session Law: 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