The bill aims to reduce the costs associated with providing child care in Washington State by expanding the business and occupation tax exemption for child care services. Specifically, it amends RCW 82.04.2905 to exempt income derived from the care and education of children up to age 12 from taxation until January 1, 2035. The exemption applies to amounts received by child care providers for the care of children under 13 years of age, as well as those under 19 with verified special needs or under court supervision. The legislation also establishes a performance statement to evaluate the effectiveness of this tax preference in reducing child care costs.

Additionally, the bill includes provisions for a review process to assess whether the tax exemption leads to a reduction in child care costs, with the intention of extending the expiration date of the tax preference if successful. The new legal language clarifies that the tax is calculated based on gross proceeds and specifies that the exemption applies only to those primarily engaged in providing child care services. The act is set to take effect on October 1, 2024.

Statutes affected:
Original Bill: 43.216.300
Substitute Bill: 82.04.2905, 43.216.300, 43.216.305
Engrossed Substitute: 82.04.2905, 43.216.300, 43.216.305
Bill as Passed Legislature: 82.04.2905
Session Law: 82.04.2905