Bill > HB1284

This bill aims to eliminate the business and occupation (B&O) tax deduction for investment income for corporations and other business entities in Washington state. The legislature argues that the current tax deduction disincentivizes in-state investment by allowing companies that invest in out-of-state markets to avoid paying taxes on investment revenues, while Washington companies investing within the state must pay taxes on their reinvestment earnings. The bill modifies existing law (RCW 82.04.4281) to remove most investment income deductions for corporations, with a limited exception for individual investors. The legislative findings emphasize that this tax loophole costs the state hundreds of millions of dollars per biennium and conflicts with the state's constitutional obligation to fund public education. By closing this tax loophole, the bill intends to create a more equitable tax system that ensures businesses pay their fair share and encourages local investment. The changes will take effect on August 1, 2025, giving businesses time to adjust to the new tax treatment of investment income.

Budget and Finance

https://app.leg.wa.gov/billsummary?BillNumber=1284&Year=2025&Initiative=false