The bill seeks to amend the capital gains tax under chapter 82.87 RCW by closing loopholes and replacing the business and occupation tax credit with a capital gains tax credit, effective from tax year 2025. Key provisions include the introduction of a nonrefundable credit against taxes due for sales or exchanges also subject to the business and occupation tax, a late payment penalty waiver, and modifications to the publication schedule for inflation adjustments. The bill also aims to treat spouses and domestic partners more consistently regarding tax obligations and introduces new definitions relevant to capital gains taxation, including "materially participated" and "qualified family-owned small business."

Additionally, the bill revises tax deduction provisions for charitable contributions, allowing deductions for amounts donated to qualified organizations with specific thresholds. It clarifies the liability of spouses and domestic partners for tax obligations, establishing joint liability unless certain conditions are met. The bill also introduces penalties for non-compliance with electronic filing requirements and mandates that brokers and barter exchanges submit IRS Form 1099-B electronically for long-term capital asset transactions. Overall, the amendments aim to enhance clarity, compliance, and fairness in the application of tax regulations in Washington.

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
Second Substitute: 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