The bill seeks to enhance funding for public schools, health care, and social services in Washington by updating the state's tax code to better align with a service-based economy. Key provisions include extending the retail sales tax to select services, repealing certain exemptions, and imposing taxes on new nicotine products. Large businesses will be required to make a one-time prepayment of state sales tax collections. The revenue generated from these changes is intended to support essential services for vulnerable populations, including children, individuals with mental health issues, and the elderly.

Additionally, the bill introduces new definitions and clarifications regarding retail sales, including the inclusion of various services such as information technology training and physical fitness activities. It specifies exclusions from the definition of retail sales, such as certain services provided between affiliated groups and labor related to public infrastructure. The bill also amends the definition of "tobacco products" to encompass a broader range of nicotine-containing items while excluding FDA-approved products. Overall, the legislation aims to modernize the tax framework to reflect current economic practices and technologies, with a phased implementation set for late 2025 and early 2026.

Statutes affected:
Original Bill: 82.04.192, 82.26.010, 82.32.045
Substitute Bill: 82.04.192, 82.26.010, 82.32.045
Engrossed Substitute: 82.04.192, 82.26.010, 82.32.045
Bill as Passed Legislature: 82.04.192, 82.26.010
Session Law: 82.04.192, 82.26.010