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 the investment income of non-banking entities, provided that their investment activities are not deemed more than incidental. This provision is set to expire on July 1, 2026.

The work group, facilitated by the Department of Revenue, will consist of various representatives, including those from financial management, investment services, nonprofit organizations, union pension funds, business associations, and accounting associations. It is tasked with providing recommendations to the legislature by November 30, 2025, to clarify the existing statute regarding investment income deductions. The work group is required to meet regularly and will also expire on November 30, 2026. The bill emphasizes the urgency of its provisions, declaring it necessary for the immediate preservation of public peace, health, or safety, and it takes effect immediately.