The proposed bill aims to restructure the business and occupation tax in Washington by introducing a new surcharge on high-grossing businesses and financial institutions. Starting January 1, 2026, a one percent surcharge will be levied on Washington taxable income exceeding $250 million in a calendar year. Certain exemptions are included, such as income subject to existing manufacturing tax rates and income for farmers or eligible apiarists. Additionally, the bill amends existing tax rates for specified financial institutions, increasing the additional tax from 1.2 percent to 1.9 percent beginning July 1, 2025.

The legislation emphasizes the importance of funding for education, public safety, health care, and basic human needs, asserting that the tax is necessary for the preservation of public peace, health, and safety. It also includes provisions for the effective administration of the new tax, requiring financial institutions to disclose their membership in consolidated financial institution groups. The bill specifies that taxes collected under this new surcharge will be deposited into the general fund, with the act taking effect on July 1, 2025, except for the surcharge, which will begin on January 1, 2026.

Statutes affected:
Original Bill: 82.04.29004