Bill > HB1998

This bill clarifies the scope of the investment income business and occupation (B&O) tax deduction in Washington state, addressing uncertainties raised by a recent state Supreme Court decision (Antio, LLC v. Department of Revenue). The bill amends RCW 82.04.4281 to provide more precise definitions and guidelines for tax deductions related to investment income. Specifically, it expands the definition of "investment" to include a wide range of financial instruments such as equities, bonds, notes, derivatives, and commodities, and adds a new definition for "factoring" (the purchase, sale, and collection of accounts receivable). The bill maintains existing provisions that allow deductions for amounts derived from investments, dividends from subsidiary entities, and inter-company loan interest, while explicitly excluding certain types of income from banking, lending, and security businesses. The legislation aims to provide greater clarity and stability for taxpayers by defining investment income more comprehensively and ensuring fair treatment across different types of financial activities. Importantly, the bill applies retroactively but does not allow for tax refunds on previously paid investments, effectively clarifying the tax treatment moving forward without creating financial liability for past transactions.

Budget and Finance

https://app.leg.wa.gov/billsummary?BillNumber=1998&Year=2025&Initiative=false