The bill establishes a business and occupation tax deduction for payment card processing activities in Washington State, allowing processors to deduct specific fees, such as interchange and network fees, from their taxable income. It introduces a new section to chapter 82.04 RCW, emphasizing the distinct nature of payment card processing businesses and ensuring that the tax implications will not retroactively affect prior periods. Additionally, the bill amends existing tax rates, setting a new rate of 3.0 percent for these activities and clarifying definitions related to "affiliated," "financial institution," and "issuer." It also revises provisions concerning workforce education investment surcharges, adjusting the maximum annual surcharge for affiliated groups and detailing reporting requirements.

Furthermore, the bill introduces a workforce education investment surcharge for businesses involved in advanced computing, allowing the department to require disclosures from these entities. A penalty of 50 percent of the total surcharge owed can be imposed for non-compliance. Exemptions from the surcharge are provided for specific healthcare entities, such as hospitals and primary care clinics, but do not extend to other affiliated group members. Revenues from the surcharge will support the workforce education investment account, and the department is authorized to conduct audits for compliance. The act is set to take effect on January 1, 2026, with certain existing laws not applying to this new legislation.

Statutes affected:
Original Bill: 82.04.290, 82.04.29004