The bill seeks to modernize Washington's tax code to better reflect the transition from a goods-based to a service-based economy, with the goal of enhancing funding for public schools, health care, and social services. 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 bill also introduces new definitions for various services, such as information technology training and physical fitness activities, while clarifying the scope of taxable services to align with contemporary economic activities.

Additionally, the bill revises the definition of "retail sales" to include a broader range of recreational activities and digital services, while excluding certain transactions, such as instructional lessons and charges for competitive events. It amends the definition of "tobacco products" to encompass all nicotine-containing products intended for human consumption, excluding FDA-approved items. The legislation also includes provisions for the validity of its sections and establishes effective dates for implementation, with some provisions taking effect in late 2025 and early 2026. Overall, the bill aims to create a more equitable and comprehensive tax framework that supports essential services for vulnerable populations in Washington.

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