This bill establishes a work group to study the taxation of investment income under RCW 82.04.4281, in response to uncertainties arising from a recent state supreme court decision. The legislature aims to delay any changes to the taxation of investment income deductions until clearer definitions or standards can be developed. The bill prohibits the Department of Revenue from assessing business and occupation tax on investment income for non-banking entities, ensuring that such income remains eligible for the deduction until further legislative action is taken. This provision is set to expire on July 1, 2026.

The work group, convened by the Department of Revenue, will consist of various stakeholders, including representatives from the department, financial management, investment services, nonprofit organizations, union pension funds, business associations, and accounting associations. The group is tasked with providing recommendations to the legislature by November 30, 2025, to clarify the existing statute. The work group is required to meet regularly and will also be subject to specific appointment and reporting requirements. This section of the bill will expire on November 30, 2026. The act is deemed necessary for the immediate preservation of public interests and takes effect immediately.