Bill > HB2020

This bill creates a new business and occupation (B&O) tax structure for payment card processing activities, establishing a specific tax rate of 3.1% for processors while allowing them to deduct certain fees from their taxable income. The bill defines key terms like "processor", "payment network", and "interchange fees", and provides detailed rules about which payment card processing activities are subject to this new tax rate. Specifically, the bill excludes certain payment card processing activities from the 3.1% rate, such as those involving credit, debit, or prepaid card transactions where the processor operates the payment network or is affiliated with the network operator, or where the processing company is also the card issuer. These excluded activities would instead be taxed at the standard business B&O tax rate. The legislation aims to address the unique nature of payment system arrangements and clarify the taxation of processors' activities, with an explicit legislative intent that this act should not be used to make inferences about the taxability of prior tax periods. The new tax rate and deduction provisions will take effect on January 1, 2026.

Budget and Finance

https://app.leg.wa.gov/billsummary?BillNumber=2020&Year=2025&Initiative=false