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WashingtonSB 62282025-2026 Regular SessionSenateWALLET

Removing a tax exemption for the warehousing and reselling of prescription drugs.

Sponsored By: Noel Frame (Democratic)

Became Law

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Bill Overview

Analyzed Economic Effects

4 provisions identified: 1 benefits, 3 costs, 0 mixed.

Lower tax for critical access pharmacies

Starting January 1, 2027, qualifying critical access pharmacies pay a 0.138% B&O tax on gross retail sales. A pharmacy qualifies if it is independent and meets one of these: more than 25 miles from any other pharmacy, the only pharmacy on an island, operated by a tribe, the only pharmacy in a high‑poverty census tract, or on the Health Care Authority’s critical access list on or before July 1, 2026. This is a lower rate than the general retail rate.

0.5% business tax on retail sales

Beginning January 1, 2027, people making retail sales in Washington pay a 0.5% B&O tax on gross proceeds. The same 0.5% rate also applies to certain retail sales that are exempt from state sales tax, subject to the law’s stated exceptions.

New tax on FAA repair stations

Starting January 1, 2027, FAA part 145 repair stations that make certain retail sales exempt from state sales tax pay a 0.2904% B&O tax on gross proceeds. This special rate ends July 1, 2040. These businesses must also file a complete annual report with the Department of Revenue.

New tax on prescription drug resellers

Beginning January 1, 2027, businesses that warehouse and resell prescription drugs for human use pay a business and occupation (B&O) tax. The rate is 0.5% of gross income for calendar year 2027 and 0.35% starting January 1, 2028. It applies to wholesalers or retailers that buy drugs and resell to pharmacies, hospitals, clinics, or other health care providers, and are registered with the U.S. Food and Drug Administration and licensed by the state Pharmacy Quality Assurance Commission. The prior warehousing‑and‑reselling tax law is repealed on that date and replaced by this one.

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Sponsors & Cosponsors

Sponsor

  • Noel Frame

    Democratic • Senate

Cosponsors

  • Bob Hasegawa

    Democratic • Senate

  • Manka Dhingra

    Democratic • Senate

Roll Call Votes

All Roll Calls

Yes: 103 • No: 88

Senate vote • 3/12/2026

Final Passage as Amended by the House

Yes: 26 • No: 23

House vote • 3/11/2026

Final Passage as Amended by the House

Yes: 52 • No: 42 • Other: 4

Senate vote • 2/28/2026

3rd Reading & Final Passage

Yes: 25 • No: 23 • Other: 1

Actions Timeline

  1. Effective date 1/1/2027.

    4/1/2026Senate

  2. Chapter 265, 2026 Laws.

    4/1/2026Senate

  3. Governor signed.

    4/1/2026legislature

  4. Delivered to Governor.

    3/13/2026legislature

  5. Speaker signed.

    3/12/2026legislature

  6. President signed.

    3/12/2026legislature

  7. Passed final passage; yeas, 26; nays, 23; absent, 0; excused, 0.

    3/12/2026Senate

  8. Senate concurred in House amendments.

    3/12/2026House

  9. Third reading, passed; yeas, 52; nays, 42; absent, 0; excused, 4.

    3/11/2026Senate

  10. Rules suspended. Placed on Third Reading.

    3/11/2026Senate

  11. Committee amendment(s) adopted as amended.

    3/11/2026Senate

  12. Referred to Rules 2 Review.

    3/9/2026Senate

  13. Rules Committee relieved of further consideration. Placed on second reading.

    3/9/2026Senate

  14. Minority; do not pass.

    3/7/2026Senate

  15. FIN - Majority; do pass with amendment(s).

    3/7/2026Senate

  16. FIN - Executive action taken by committee.

    3/7/2026Senate

  17. First reading, referred to Finance.

    3/3/2026Senate

  18. Third reading, passed; yeas, 25; nays, 23; absent, 0; excused, 1.

    2/28/2026Senate

  19. Rules suspended. Placed on Third Reading.

    2/28/2026Senate

  20. Floor amendment(s) adopted.

    2/28/2026Senate

  21. Placed on second reading by Rules Committee.

    2/27/2026Senate

  22. Minority; without recommendation.

    2/23/2026Senate

  23. Minority; do not pass.

    2/23/2026Senate

  24. Passed to Rules Committee for second reading.

    2/23/2026Senate

  25. WM - Majority; do pass.

    2/19/2026Senate

Bill Text

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