Bill > SB5111

This bill addresses the taxation of document recording surcharges for title and escrow businesses in Washington State. Specifically, the bill clarifies that amounts remitted to county filing offices for document recording are not subject to sales and use or business and occupation taxes. The legislation was prompted by recent Department of Revenue assessments of title and escrow businesses for failing to collect taxes on recording surcharges, which the businesses argue created significant financial hardship. The bill references a court of appeals decision that classified the document recording surcharge as an excise tax primarily aimed at alleviating the housing crisis, with only a small portion used for county administrative costs. To qualify for the tax exemption, escrow businesses must be primarily engaged in escrow agent services and separately identify the recording remittance amounts on settlement statements, HUD-1 forms, or closing disclosures. The bill will take effect on January 1, 2026, and provides relief for title and escrow businesses by explicitly excluding document recording surcharges from taxation, addressing what the legislature views as an unfair and unexpected tax burden on these businesses.

Budget and Finance

https://app.leg.wa.gov/billsummary?BillNumber=5111&Year=2025&Initiative=false