The proposed bill introduces a payroll expense tax targeting large employers in Washington, specifically those with payroll expenses exceeding the social security wage threshold. Set to commence on July 1, 2026, the tax will be levied at a rate of five percent on excess employee wages, with an exemption for employers whose total employee wages do not exceed $7,000,000 in the previous calendar year. The revenue generated from this tax is earmarked to support public schools, healthcare, social services, and other essential programs, aiming to create a more equitable tax system in the state.

In addition to the tax provisions, the bill outlines compliance requirements for employers, including record-keeping and reporting obligations, and establishes penalties for non-compliance, such as fines and potential property seizure for delinquent taxes. It introduces new sections to the Revised Code of Washington regarding tax collection, administrative procedures, and judicial review, ensuring that the commissioner’s decisions are presumed correct in court and that remedies for assessments and claims are exclusive to the outlined procedures. The bill also includes a severability clause to maintain the act's effectiveness if any provision is deemed invalid.