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WashingtonSB 62282025-2026 Regular SessionSenate

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

Sponsored By: Noel Frame (Democratic)

Signed by Governor

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Bill Overview

Analyzed Economic Effects

2 provisions identified: 1 benefits, 1 costs, 0 mixed.

Lower taxes for qualifying independent pharmacies

Beginning January 1, 2027, qualifying Washington pharmacies pay a lower business and occupation tax: 0.138% of gross income from retail activity. They must be independent pharmacies that meet at least one critical access test. They qualify if more than 25 miles from another pharmacy, the only pharmacy on an island, or operated by a tribe. They also qualify if they are the only pharmacy in a high-poverty census tract. Another qualifying route is inclusion on the Health Care Authority's critical access pharmacy list on or before July 1, 2026. Ownership or operation by large for-profit pharmacy businesses with more than 10 locations nationwide, pharmacy benefit managers, or publicly traded entities disqualifies them, including through subsidiaries or affiliates.

New tax on prescription drug distributors

Beginning January 1, 2027, Washington removes the tax preference for covered businesses that warehouse and resell human prescription drugs. They pay business and occupation tax equal to 0.5% of gross income during 2027 and 0.35% beginning January 1, 2028. Coverage applies to wholesalers or retailers buying these drugs from manufacturers or wholesalers and reselling them to retail sellers or health care providers. Buyers include hospitals and clinics. Covered businesses must be registered with the federal Drug Enforcement Administration and licensed by Washington's Pharmacy Quality Assurance Commission.

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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