The proposed bill establishes a new excise tax on large operating companies in Washington State, specifically targeting payroll expenses that exceed the minimum wage threshold associated with the additional Medicare tax. Effective July 1, 2026, the tax will be set at a rate of five percent on wages above $125,000, categorized as a "high earning job." The revenues generated will be allocated to the newly created "Well Washington fund account," with 51 percent directed towards higher education, healthcare (particularly Medicaid), cash assistance programs, and energy and housing initiatives, while the remaining 49 percent will go to the state general fund. The bill also includes exemptions for employers with total employee wages below $7 million and provides a credit for eligible city payroll expense taxes paid by employers.

To ensure oversight, the bill establishes the "Well Washington fund oversight and accountability board," comprising members from both the House and Senate, along with gubernatorial appointees with relevant expertise. This board will meet three times a year to guide funding needs and ensure effective use of the Well Washington fund. The legislation also introduces new sections regarding tax collection, employer reporting requirements, and penalties for non-compliance, including immediate liability for taxes upon business termination and the authority for the commissioner to issue orders for delinquent taxes. Additionally, it outlines a process for employers to appeal tax assessments and mandates that all collected taxes, interest, and penalties be deposited into the state’s general fund until July 1, 2027, after which a portion will be allocated to the Well Washington fund account.