The bill aims to clarify the scope of the investment income business and occupation tax deduction as outlined in RCW 82.04.4281, particularly in light of recent judicial interpretations that have created uncertainty regarding the deductibility of investment income. The legislature seeks to ensure fairness and stability for taxpayers by revising the existing law to prevent a restrictive interpretation that could arise from the state supreme court's decision in Antio, LLC v. Department of Revenue. The revisions are intended to maintain the clarity established by previous legislation in response to earlier court rulings.

Key amendments to RCW 82.04.4281 include the addition of definitions for "factoring," "investment," "lending business," and "security business," which aim to provide clearer guidelines on what constitutes deductible investment income. The bill specifies that amounts derived from factoring and various types of investments are deductible, while also clarifying that certain financial activities, such as those conducted by banking or security businesses, are not eligible for the deduction. Additionally, the act is retroactive but does not create a right to refunds for taxes paid on investment income prior to its effective date.

Statutes affected:
Original Bill: 82.04.4281