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 more 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," aligns "materially participated" with treasury regulations, and specifies tax deduction provisions for charitable donations. It also mandates electronic filing of tax returns, outlines penalties for late filings, and clarifies the joint liability of spouses or domestic partners. Furthermore, the bill introduces new requirements for brokers regarding the electronic submission of IRS Form 1099-B and establishes penalties for non-compliance, with new provisions taking effect on January 1, 2026.

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