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. Specifically, 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 which a credit is allowed under RCW 82.04.440. Additionally, the bill amends RCW 82.04.29004 to adjust the tax rates for specified financial institutions, increasing the additional tax from 1.2 percent to 1.9 percent beginning July 1, 2025.

The bill emphasizes the importance of funding for education, public safety, health care, and basic human needs, asserting that the new tax structure is necessary for the state's obligations in these areas. It also includes provisions for the effective administration of the tax, requiring financial institutions to disclose their membership in consolidated financial institution groups. The act is set to take effect on July 1, 2025, with the surcharge on high-grossing businesses commencing on January 1, 2026.

Statutes affected:
Original Bill: 82.04.29004