The bill seeks to enhance financial support for students and children by introducing targeted sales tax exemptions for educational and enrichment programs. It amends RCW 82.04.050 to redefine "sale at retail" or "retail sale," explicitly excluding charges for "before-and-after school care programs" and classes offered by "arts and cultural nonprofit organizations" that primarily serve school-aged children. These nonprofit organizations must be exempt from tax under section 501(c)(3) of the federal internal revenue code, emphasizing their role in promoting education in the arts. The bill also clarifies various activities that constitute retail sales, including tangible personal property and certain athletic or fitness facility services, while specifying exceptions for charges that do not qualify as retail sales.

Additionally, the bill modernizes the tax framework for digital goods and services by amending the definitions of "sale at retail" and "retail sale" to include digital goods, digital codes, and digital automated services, while excluding specific services provided to elementary and secondary schools, such as custom software. It defines "data processing" as activities that convert data into usable information and includes certain charges related to tangible personal property and operator services in the retail sales definition. The bill establishes that the terms "sale at retail" and "retail sale" do not apply to services provided to educational institutions and sets an effective date of July 1, 2026, while clarifying that certain existing laws do not apply to this act. Overall, the bill aims to provide financial relief for educational programs and modernize tax regulations for digital services.

Statutes affected:
Original bill: 82.04.050