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WashingtonHB 24872025-2026 Regular SessionHouse

Concerning taxes imposed on insurers operating within the state.

Sponsored By: Nicole Macri (Democratic)

Signed by Governor

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Bill Overview

Analyzed Economic Effects

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

Insurance tax debt gets repayment relief

Beginning June 11, 2026, qualifying taxpayers receive eligible penalty and interest waivers and a three-year business-tax repayment option. Relief covers income earned October 2, 2019, through March 31, 2026, wrongly treated as exempt under insurance-related business-tax rules. That income must not have been subject to Washington premium taxes under chapters 48.14 or 48.15 RCW. Taxpayers must submit a completed application and proposed repayment schedule by December 31, 2026, then fully pay the approved schedule. The tax itself remains owed; evasion, negligence, and avoidance penalties are not waived, and late or incomplete payments bring additional charges. The program expires January 1, 2029, and tax liabilities remain subject to verification.

Insurers get education surcharge tax relief

Beginning January 1, 2022, qualifying insurers, health maintenance organizations, and health care service contractors are exempt from the workforce education surcharge. They must be required to report and pay Washington premium taxes during the same reporting period. The exemption also covers persons exempt from premium taxes under RCW 48.14.0201(6), but not amounts other affiliated-group members receive. Separately, groups subject to the surcharge have a $25 million annual combined cap instead of $75 million. To qualify, at least 50% of the group’s prior-year worldwide gross revenue must come from insurance premium payments.

Insurers face narrower business tax exemptions

The law narrows Washington’s business and occupation tax exemption, retroactive to tax periods beginning October 2, 2019. Under the general rule, the insurer must be subject to Washington premium taxes, and only the premium-tax payer qualifies. The law combines the separate exemption for health maintenance organizations, health care service contractors, and certified health plans into this framework. Separate exemptions cover specified premium-tax-exempt persons’ premiums and prepayments, regulated annuity payments, and assigned-risk premiums taxed through servicing carriers. Eligible captive insurers are treated as having paid premium taxes for periods before May 12, 2021. Qualifying captive insurers tied to public higher education institutions also receive an exemption for their insurance business.

Clinic affiliates get education surcharge exemptions

Beginning January 1, 2022, the workforce education surcharge exemption includes qualifying independent practice associations and accountable care organizations. They must be affiliated with a clinic offering primary care, multispecialty and surgical services, including behavioral health services. The exemption does not cover amounts received by other members of the affiliated group.

Sponsors & Cosponsors

Sponsor

  • Nicole Macri

    Democratic • House

Cosponsors

There are no cosponsors for this bill.

Roll Call Votes

All Roll Calls

Yes: 78 • No: 66

Senate vote • 3/11/2026

3rd Reading & Final Passage

Yes: 27 • No: 22

House vote • 3/6/2026

3rd Reading & Final Passage

Yes: 51 • No: 44 • Other: 3

Actions Timeline

  1. Effective date 6/11/2026.

    4/1/2026House

  2. Chapter 263, 2026 Laws.

    4/1/2026House

  3. Governor signed.

    4/1/2026legislature

  4. President signed.

    3/12/2026legislature

  5. Delivered to Governor.

    3/12/2026legislature

  6. Third reading, passed; yeas, 27; nays, 22; absent, 0; excused, 0.

    3/11/2026House

  7. Rules suspended. Placed on Third Reading.

    3/11/2026House

  8. Passed to Rules Committee for second reading.

    3/11/2026House

  9. Placed on second reading by Rules Committee.

    3/11/2026House

  10. Speaker signed.

    3/11/2026legislature

  11. Minority; do not pass.

    3/10/2026House

  12. WM - Majority; do pass.

    3/10/2026House

  13. First reading, referred to Ways & Means.

    3/9/2026House

  14. Third reading, passed; yeas, 51; nays, 44; absent, 0; excused, 3.

    3/6/2026House

  15. Rules suspended. Placed on Third Reading.

    3/6/2026House

  16. Floor amendment(s) adopted.

    3/6/2026House

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

    2/27/2026House

  18. Referred to Rules 2 Review.

    2/9/2026House

  19. Minority; without recommendation.

    2/9/2026House

  20. Minority; do not pass.

    2/9/2026House

  21. FIN - Majority; do pass.

    2/9/2026House

  22. FIN - Executive action taken by committee.

    2/9/2026House

  23. First reading, referred to Finance.

    1/14/2026House

  24. Introduced

    1/14/2026House

Bill Text

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