The bill proposes a business and occupation tax deduction specifically for payment card processing activities in Washington State, allowing processors to deduct certain fees, such as interchange and network fees, from their taxable income. It establishes a new tax rate of 3.0 percent for these activities and clarifies that the unique nature of payment card processing distinguishes these businesses from other taxpayers. Additionally, the bill amends existing tax rates and definitions related to business activities for processors and ensures that tax implications from prior periods are not inferred from this act.

Moreover, the legislation introduces a workforce education investment surcharge for select advanced computing businesses, capped at $9 million annually for affiliated groups. It includes provisions for penalties if any member of an affiliated group is found to have intentionally evaded the surcharge. The bill outlines exemptions from the surcharge for hospitals and certain provider clinics, while revenues generated will be allocated to the workforce education investment account. It will take effect on January 1, 2026, and clarifies that certain existing laws will not apply to this act.

Statutes affected:
Original Bill: 82.04.290, 82.04.29004