This bill authorizes counties in Washington State to impose a business and occupation tax aimed at funding essential services such as behavioral health, public safety, transit, and waste management. It addresses the limitations of relying solely on sales and property taxes, which can disproportionately impact lower-income residents. The legislation establishes a framework for counties to levy this tax, including a model ordinance for uniformity and fairness, a minimum small business tax threshold, and a system to prevent multiple taxation. It also outlines a referendum procedure for any new or increased tax rates, mandates a credit system to avoid double taxation, and sets a maximum tax rate of 0.0020, which can only be increased with voter approval.

Additionally, the bill introduces new provisions regarding the allocation and apportionment of gross income for tax purposes, particularly for business and occupation taxes. It specifies that gross income from royalties must be allocated to the taxpayer's commercial domicile, while income from services must be apportioned based on payroll and service income factors. The bill allows for alternative methods of allocation if standard provisions do not fairly represent a taxpayer's business activity and establishes a burden of proof for those seeking to use these alternatives. It also includes new sections addressing confidentiality of tax information, specific allocation rules for printing and publishing activities, and a tax deduction for professional employer organizations. The new regulations will take effect on January 1, 2027, with certain provisions related to printing and publishing activities set to take effect on January 1, 2034.