The bill establishes a local government option to impose a special excise tax on short-term rentals, allowing counties, cities, or towns in Washington to levy a tax of up to four percent on the sale of or charge for lodging. This tax is intended to fund essential affordable housing programs and must be collected by the state department at no cost to the local governments. The legislation requires local authorities to adopt a resolution of intent before imposing the tax and mandates that the proceeds be deposited into an essential affordable housing local assistance account, which can only be used for specific housing-related purposes, such as acquiring or rehabilitating affordable housing and providing rental assistance.

Additionally, the bill amends existing laws to clarify the tax rates and exemptions applicable to lodging sales, ensuring that the new excise tax does not exceed certain combined tax limits. It also includes provisions for local jurisdictions to report annually on the use of tax revenues and allows for interlocal agreements to jointly undertake housing projects. The bill specifies that the new tax cannot be imposed before April 1, 2027, and incorporates relevant administrative provisions from existing tax laws.

Statutes affected:
Original bill: 67.28.181, 82.14.410