Bill > HB2081

This bill modifies several aspects of Washington state's business and occupation (B&O) tax system, with changes affecting various business sectors and investment income taxation. The bill makes several key modifications: First, it adjusts B&O tax rates for many business activities from around 0.484% to 0.5%, impacting extractors, manufacturers, retailers, and various service providers. Second, it introduces a new surcharge on large companies, specifically targeting businesses with annual revenues over $250 million, which will pay an additional 0.5% tax on income above that threshold beginning in 2026. Third, the bill increases the advanced computing surcharge rate from 1.22% to 7.5% starting in 2026, with a cap of $75 million annually for affiliated groups. Fourth, the legislation clarifies the tax treatment of investment income, providing more specific guidelines about what constitutes "incidental" investment income and introducing new definitions for collective investment vehicles and family investment vehicles. The bill also directs the Department of Revenue to provide guidance on distinguishing personal investment income from business income. These changes are intended to generate additional revenue for public services while providing more clarity in tax classification and reporting for businesses. The modifications will be implemented in phases, with most changes taking effect between 2025 and 2027.

Budget and Finance

https://app.leg.wa.gov/billsummary?BillNumber=2081&Year=2025&Initiative=false