The bill seeks to amend the capital gains tax under chapter 82.87 RCW by closing existing 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 capital gains taxes for transactions 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 clarifies the treatment of spouses and domestic partners regarding tax liabilities, ensuring they are jointly liable unless specific conditions are met. Additionally, it introduces new definitions related to capital gains tax, such as "intangible personal property" and "qualified family-owned small business," while specifying that unused credits cannot be carried forward or refunded.

Further amendments include changes to tax deduction provisions for charitable donations, allowing deductions beyond a minimum threshold with a cap, and new requirements for electronic filing of tax returns. The bill outlines penalties for late filings and establishes a new structure for penalties based on payment timing. It also mandates brokers and barter exchanges to electronically submit IRS Form 1099-B for long-term capital asset transactions, with penalties for non-compliance. The bill will take effect on January 1, 2026, and includes a provision 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
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