The proposed bill establishes a limited waiver of interest and penalties for taxpayers who inadvertently fail to collect and remit sales and use taxes on specific services as outlined in chapter 422, Laws of 2025. A new section is added to chapter 82.32 RCW, detailing the conditions under which the Department of Revenue will waive penalties and interest. These conditions include the timely filing of amended returns, full payment of outstanding tax liabilities, a history of compliance over the past 36 months, and the absence of prior evasion penalties. Taxpayers must also submit a completed application for the waiver in a prescribed format.

The bill specifies that the waiver does not apply to tax liabilities for reporting periods beginning on or after January 1, 2028, and it will expire on January 1, 2030. Additionally, the bill clarifies that the department retains the right to assess taxes, penalties, and interest for any amounts determined to be underpaid, even if a taxpayer has previously received a waiver. Overall, this legislation aims to provide relief to compliant taxpayers who may have unintentionally failed to meet their tax obligations regarding newly taxable services.