The proposed bill seeks to modernize Washington's tax code by extending the retail sales tax to select services and nicotine products, thereby enhancing funding for public schools, health care, and social services. Key changes include the introduction of new definitions for taxable services such as information technology consulting and custom website development, as well as the repeal of certain exemptions related to digital automated services and custom software. The bill also clarifies the definition of "retail sale" to encompass various digital goods and services, including charges for accessing prewritten software and associated services, while expanding the scope to include extended warranties and tangible personal property.

Additionally, the bill mandates a one-time prepayment of state sales tax collections for large businesses with taxable retail sales exceeding $3,000,000 in 2026, requiring them to remit 80% of the state sales tax collected during June 2026 by June 25, 2027. It introduces penalties for underpayment and establishes interest calculations on tax liabilities, while allowing for due date extensions during declared emergencies. The legislation aims to streamline tax collection processes and ensure timely revenue for the state, with various provisions set to take effect between October 1, 2025, and January 1, 2027.

Statutes affected:
Original Bill: 82.04.192, 82.26.010, 82.32.045