This bill amends RCW 82.04.320 to clarify the business and occupation tax exemption for insurers, addressing unintended tax loopholes that have emerged from recent court rulings. The legislation aims to restore the original intent of the exemption, which was to prevent double taxation on insurance businesses that pay a premium tax. The bill introduces new language to specify that the exemption applies to gross premiums received by insurers that have paid insurance premium taxes to the state, and it consolidates similar exemptions previously found in RCW 82.04.322, which is being repealed. Additionally, the bill establishes definitions for "insurance business," "insurer," and "premium" to ensure clarity in the application of the tax.

Furthermore, the bill applies retroactively to tax periods beginning on or after October 2, 2019, the date when the Department of Revenue issued guidance on the exemptions. This retroactive application is intended to treat businesses that did not follow the guidance equally to those that did. The legislation also ensures that enforcement actions taken by the Department of Revenue prior to the effective date of the new provisions remain valid. Overall, the bill seeks to streamline tax administration for insurers while safeguarding state revenue.

Statutes affected:
Original bill: 82.04.322