All Roll Calls
Yes: 609 • No: 705
WashingtonHB 20812025-2026 Regular SessionHouseWALLET
Modifying business and occupation tax surcharges, rates, and the advanced computing surcharge cap, clarifying the business and occupation tax deduction for certain investments, and creating a temporary business and occupation tax surcharge on large companies.
Sponsored By: Joe Fitzgibbon (Democratic)
Became Law
Your PRIA Score
Score Hidden
Personalized for You
How does this bill affect your finances?
Sign up for a PRIA Policy Scan to see your personalized alignment score for this bill and every other piece of legislation we track. We analyze your financial profile against policy provisions to show you exactly what matters to your wallet.
Bill Overview
Analyzed Economic Effects
10 provisions identified: 2 benefits, 6 costs, 2 mixed.
Advanced computing surcharge higher, $75M cap
Select advanced computing businesses owe a surcharge on certain service income: 1.22% through December 31, 2025, and 7.5% starting January 1, 2026. The combined surcharge for all members of an affiliated group is capped at $75 million per year. Companies must report and pay quarterly, and the department can require affiliate disclosures; intentional evasion triggers a penalty equal to 50% of the group’s annual surcharge. Revenue from this surcharge goes to the Workforce Education Investment Account.
More seats in CS and engineering
Starting in fiscal year 2028, state universities add funded seats in computer science and engineering when qualified Washington applicants exceed available spots by 100. The number of added seats matches the shortfall and is funded with surcharge revenue.
0.5% business tax on goods and digital
The law sets a 0.5% business tax for many activities tied to goods and digital sales. Extractors and manufacturers pay 0.5% of the value of products. Retailers and wholesalers pay 0.5% of gross sales, including certain sales once treated as exempt. Sellers of digital goods and digital services sourced to Washington pay 0.5% and must file and pay electronically. These changes raise taxes for many businesses.
0.5% business tax on many services
The law sets a 0.5% business tax on many listed services. This includes construction for public bodies, processing for hire, cold storage and warehousing, insurance producers and title agents, nonprofit research, and certain broadcasting (with out‑of‑state audience adjustments). Work cleaning up radioactive waste at weapons and nuclear research sites is also taxed at 0.5%. Certified inpatient or recovery house chemical dependency services paid by government, and services on canned salmon for others, are taxed at 0.5%. These changes increase costs across those service lines.
Extra tax on large financial institutions
Specified large financial institutions pay an extra tax on service income. The rate is 1.2% from January 1, 2020 through September 30, 2025, and 1.5% starting October 1, 2025. This applies to members of financial groups with at least $1 billion in annual net income. The money goes to the state general fund.
Higher taxes on contests of chance
Businesses that run contests of chance pay 1.8% of contest income. They also pay an extra tax that was 0.2% through June 30, 2024 and is 0.26% after that. The extra tax does not apply if contest income is under $50,000 a year. Prize values, player winnings, and progressive jackpot accruals do not count as income. The added tax money goes to the state’s problem gambling account.
Temporary surcharge on very large businesses
Beginning January 1, 2026, businesses pay a 0.5% surcharge on Washington taxable income over $250 million in a year. Several categories are excluded, including certain manufacturing receipts, listed retail sales exemptions, specified fuel transactions, farmers and eligible apiarists, and amounts subject to listed RCWs. Excluded income does not count toward the $250 million threshold. The surcharge ends December 31, 2029.
Child care tax break until 2035
Providing child care for less than 24 hours is taxed at 0.5%. But if you are mainly a child care provider, money you get for children under 13 is exempt until January 1, 2035. The exemption also covers children under 19 with a verified special need or under court supervision. This lowers taxes for many providers through 2034, but some care remains taxable.
Clearer rules for investment-income deduction
The law clarifies who can deduct investment income from business tax. Investment income counts as incidental—and deductible—only if it is under 5% of your worldwide gross income. Some groups, like nonprofits, collective investment vehicles, retirement accounts, and family investment vehicles, can deduct investment income even if it is not incidental. Amounts from loans, revolving credit, installment sales, and banking, lending, or securities businesses are not deductible, and the collective investment vehicle deduction excludes service fees, non‑investment income, and factoring. The Department of Revenue must issue rules and examples.
Lower rate for FAA repair stations
FAA Part 145 repair stations pay a 0.2904% business tax on certain exempt retail sales. This special rate runs through July 1, 2040. These businesses must file a full annual report with the Department of Revenue.
Free Policy Watch
You just read the policy. Now see what it costs you.
Pick a topic. PRIA runs your household against live legislation and sends you a free personalized readout.
Pick a topic to get started
Sponsors & Cosponsors
Sponsor
Joe Fitzgibbon
Democratic • House
Cosponsors
Gerry Pollet
Democratic • House
Julia Reed
Democratic • House
Lisa Parshley
Democratic • House
Liz Berry
Democratic • House
Nicole Macri
Democratic • House
Shaun Scott
Democratic • House
Strom Peterson
Democratic • House
Roll Call Votes
Senate vote • 4/26/2025
483 Muzzall Pg 32 Ln 3
Yes: 21 • No: 27
Senate vote • 4/26/2025
485 Muzzall Pg 8 Ln 34
Yes: 19 • No: 29
Senate vote • 4/26/2025
481 Christian Pg 30 Ln 28
Yes: 19 • No: 29
Senate vote • 4/26/2025
502 MacEwen Pg 30 Ln 28
Yes: 19 • No: 29
Senate vote • 4/26/2025
3rd Reading & Final Passage
Yes: 26 • No: 22
Senate vote • 4/26/2025
486 Braun Pg 41 Ln 32
Yes: 21 • No: 27
Senate vote • 4/26/2025
477 Short Pg 31 Ln 32
Yes: 19 • No: 29
Senate vote • 4/26/2025
489 Wagoner Pg 31 Ln 32
Yes: 20 • No: 28
Senate vote • 4/26/2025
487 Warnick Pg 32 Ln 3
Yes: 20 • No: 28
House vote • 4/22/2025
3rd Reading & Final Passage
Yes: 50 • No: 48
House vote • 4/22/2025
1330 Abell Pg 41 Ln 39
Yes: 45 • No: 53
House vote • 4/22/2025
Motion to Place Measure on 3rd Reading & Final Passage
Yes: 59 • No: 39
House vote • 4/22/2025
1349 Dent Pg 31 Ln 25
Yes: 45 • No: 53
House vote • 4/21/2025
1333 Waters Pg 12 Ln 7
Yes: 45 • No: 53
House vote • 4/21/2025
1332 Connors Pg 31 Ln 8
Yes: 45 • No: 53
House vote • 4/21/2025
1334 Manjarrez Pg 21 Ln 40
Yes: 46 • No: 52
House vote • 4/21/2025
1331 Caldier Pg 9 Ln 16
Yes: 45 • No: 53
House vote • 4/21/2025
1336 Griffey Pg 12 Ln 30
Yes: 45 • No: 53
Actions Timeline
Effective date 7/27/2025*.
5/20/2025HouseChapter 420, 2025 Laws.
5/20/2025HouseGovernor signed.
5/20/2025legislatureDelivered to Governor.
4/27/2025legislatureRules suspended. Placed on Third Reading.
4/26/2025HousePresident signed.
4/26/2025legislatureThird reading, passed; yeas, 26; nays, 22; absent, 0; excused, 0.
4/26/2025HouseSpeaker signed.
4/26/2025legislatureMinority; do not pass.
4/25/2025HouseWM - Majority; do pass.
4/25/2025HousePassed to Rules Committee for second reading.
4/25/2025HousePlaced on second reading by Rules Committee.
4/25/2025HouseThird reading, passed; yeas, 50; nays, 48; absent, 0; excused, 0.
4/22/2025HouseRules suspended. Placed on Third Reading.
4/22/2025HouseFloor amendment(s) adopted.
4/22/2025HouseFirst reading, referred to Ways & Means.
4/22/2025HouseHeld on calendar.
4/21/2025HouseAmendment ruled beyond the scope and object of the bill.
4/21/2025House1st substitute bill substituted.
4/21/2025HouseFIN - Executive action taken by committee.
4/19/2025HouseFIN - Majority; 1st substitute bill be substituted, do pass.
4/19/2025HouseMinority; do not pass.
4/19/2025HousePlaced on second reading.
4/19/2025HouseFirst reading, referred to Finance.
4/16/2025HouseIntroduced
4/16/2025House
Bill Text
Engrossed Substitute
6/12/2025
Session Law
5/23/2025
Bill as Passed Legislature
4/26/2025
Substitute Bill
4/19/2025
Original Bill
4/16/2025
Related Bills
SB 6231 — Removing a tax exemption for the replacement of equipment for data centers.
SB 6260 — Implementing efficiencies and programming changes in public education.
SB 6228 — Removing a tax exemption for the warehousing and reselling of prescription drugs.
HB 2034 — Concerning termination and restatement of plan 1 of the law enforcement officers' and firefighters' retirement system.
HB 2689 — Concerning the working connections child care program.
HB 2487 — Concerning taxes imposed on insurers operating within the state.
Take It Personal
Get Your Personalized Policy View
Take the PRIA Score to see how policy affects your household, then upgrade to PRIA Full Coverage for year-round monitoring.
Already have an account? Sign in