Bill > HB1560

This bill introduces a new tax targeting high-earning executives at nonprofit hospitals in Washington state, with the goal of promoting health care affordability and equity. Starting January 1, 2026, hospitals will be required to pay a 7.5% tax on the annual compensation of their top five non-patient-care employees (including the lead administrator) when that compensation exceeds 10 times the state's average annual wage. The legislation stems from the legislature's findings that some nonprofit hospitals have large revenues and inflated administrative salaries while failing to adequately serve their communities, such as by not providing essential reproductive health services or maintaining safe working conditions. The revenue generated from this excess compensation tax will be used to fund programs that advance health equity and expand access to reproductive care. The bill defines key terms like "covered employees" and "excess compensation" and allows hospitals affiliated with each other to report taxes on a single return. Hospitals can also deduct compensation for work performed outside the state that does not further their business activities. The tax is additional to other existing taxes and is part of a broader effort to redirect financial resources to support vulnerable populations' healthcare needs.

Budget and Finance

https://app.leg.wa.gov/billsummary?BillNumber=1560&Year=2025&Initiative=false