The bill aims to enhance the administration of tax preferences in Washington by implementing recommendations from the tax preference performance review process. It seeks to eliminate obsolete tax preferences, clarify legislative intent, and address changes in constitutional law. The legislation acknowledges the existence of 786 tax exemptions that result in significant taxpayer savings, while also recognizing that some exemptions may serve private interests rather than public policy objectives. To improve transparency and accountability, the bill establishes a framework for evaluating tax preferences, which includes regular assessments by the joint legislative audit and review committee and the citizen commission for performance measurement of tax preferences. Key provisions include the reenactment and amendment of several sections of the Revised Code of Washington (RCW), the creation of new sections, and the repeal of certain outdated tax preferences.

Additionally, the bill modifies tax regulations related to various industries, particularly focusing on the aerospace sector, timber extraction, and health care organizations. It introduces a new tax rate of 0.357 percent for significant commercial airplane manufacturers, contingent upon meeting specific conditions, and establishes a timeline for the expiration of these tax benefits. The bill also clarifies tax obligations for health maintenance organizations and self-funded multiple employer welfare arrangements, requiring them to pay a tax based on their gross income from health care services. Notably, the bill includes provisions for the effective administration of the additional tax imposed, requiring disclosure of affiliations among financial institutions, and it repeals several outdated tax provisions. Overall, the legislation aims to create a more efficient tax code that better serves the interests of Washington's residents while promoting economic activity in key industries.

Statutes affected:
Original Bill: 82.16.050, 82.04.260, 82.32.534, 82.04.4461, 82.04.110, 82.04.120, 82.04.43395, 74.60.010, 82.12.022, 82.21.040, 82.23A.030, 82.29A.130, 82.45.010, 82.45.030, 82.64.030, 84.36.010, 84.36.030, 82.04.29004, 82.04.4451, 82.04.540, 82.04.620, 82.04.051, 82.04.257, 82.32.080, 82.04.29002, 82.04.297, 82.04.360, 82.04.43396, 82.04.280, 82.48.030, 82.62.030, 82.85.010, 82.85.020, 82.85.040, 82.04.43391, 82.08.0262, 82.12.0254, 82.04.627, 82.16.020
Substitute Bill: 82.04.260, 82.32.534, 82.04.4461, 82.04.110, 82.04.120, 82.04.43395, 74.60.010, 82.12.022, 82.21.040, 82.23A.030, 82.29A.130, 82.45.010, 82.45.030, 82.64.030, 84.36.010, 84.36.030, 82.04.29004, 82.04.280, 82.48.030, 84.36.133, 82.62.030, 82.85.010, 82.85.020, 82.85.040, 82.04.43391, 82.08.0262, 82.12.0254, 82.04.627, 82.04.390, 82.04.460, 82.04.462
Engrossed Substitute: 82.04.260, 82.32.534, 82.04.4461, 82.04.405, 82.04.29004, 82.04.280, 82.04.390, 82.04.460, 82.04.462
Bill as Passed Legislature: 82.04.260, 82.32.534, 82.04.405, 82.04.29004, 82.04.280, 82.04.290, 82.04.390
Session Law: 82.04.260, 82.32.534, 82.04.405, 82.04.29004, 82.04.280, 82.04.290, 82.04.390