The proposed bill seeks to enhance funding for essential services in Washington State, including public schools, higher education, and healthcare, by revising the business and occupation (B&O) tax structure. Key modifications include standardizing tax rates for various business activities to a uniform rate of 0.5 percent, introducing a temporary surcharge on large companies with revenues exceeding $250 million, and increasing the tax rate for businesses operating contests of chance from 1.5 percent to 1.8 percent. The bill also mandates that 14.3 percent of revenues from certain tax rates be allocated to the workforce education investment account, while clarifying tax deductions for specific investments and requiring detailed reporting from businesses claiming certain tax rates.

Additionally, the bill amends existing tax regulations for various sectors, including child care, aerospace, and timber industries, with specific adjustments to tax rates and compliance requirements. For instance, the tax rate for child care services is adjusted to 0.5 percent, while a new tax rate of 0.5 percent is established for retail sales of tooling designed for commercial airplane manufacturing. The legislation also introduces a new surcharge for advanced computing businesses and clarifies definitions related to financial and investment vehicles. Overall, the bill aims to create a more equitable tax system that supports state revenue and essential services while ensuring compliance and clarity in tax obligations.

Statutes affected:
Original Bill: 82.04.230, 82.04.240, 82.04.250, 82.32.534, 82.32.080, 82.04.270, 82.04.280, 82.04.285, 82.04.290, 82.04.4461, 82.04.2906, 82.04.260, 82.04.29004, 82.04.462
Substitute Bill: 82.04.230, 82.04.240, 82.04.250, 82.32.534, 82.32.080, 82.04.270, 82.04.280, 82.04.285, 82.04.290, 82.04.4461, 82.04.2906, 82.04.260, 82.04.29004, 82.04.462
Engrossed Substitute: 82.04.230, 82.04.240, 82.04.250, 82.32.534, 82.32.080, 82.04.270, 82.04.280, 82.04.285, 82.04.290, 82.04.4461, 82.04.2906, 82.04.260, 82.04.29004, 82.04.462
Bill as Passed Legislature: 82.04.230, 82.04.240, 82.04.250, 82.32.534, 82.32.080, 82.04.270, 82.04.280, 82.04.285, 82.04.290, 82.04.4461, 82.04.2906, 82.04.260, 82.04.29004, 82.04.462
Session Law: 82.04.230, 82.04.240, 82.04.250, 82.32.534, 82.32.080, 82.04.270, 82.04.280, 82.04.285, 82.04.290, 82.04.4461, 82.04.2906, 82.04.260, 82.04.29004, 82.04.462