House Bill 1115 (prefiled 12/23/24, read 01/13/25) would reenact and amend RCW 82.04.050 and add new sections to chapter 82.04 RCW to clarify excise tax treatment of amounts title and escrow businesses receive from clients for remittance to county filing offices to record documents. The bill cites a Court of Appeals decision (BIAW v. State, Feb. 27, 2024) and legislative findings that the Department of Revenue recently assessed title and escrow businesses for sales, use, and business and occupation taxes on recording surcharges without prior guidance, and states a policy that sales and use and B&O taxes may not be levied on a document recording surcharge as characterized by that court opinion. Substantively, the bill revises the statutory definition of "sale at retail" or "retail sale," enumerating many inclusions and exclusions for services and activities (including expanded lists addressing software, digital goods, athletic and fitness facility charges, extended warranties, and many recreational and amusement activities). It creates a new section providing that chapter 82.04 does not apply to amounts remitted to a county filing office for recording documents when the remitting person is primarily engaged in escrow agent services as defined in cited RCWs and the remittance amounts are separately identified on a settlement statement, HUD-1, or closing disclosure. The act also states that RCW 82.32.805 and 82.32.808 do not apply to this act and sets an effective date of January 1, 2026. The changes are primarily definitional and procedural tax-law clarifications and exemptions, not the creation of a new criminal offense or change to criminal penalties. The provided text is truncated in places and omits some definitions and portions of the amended subsection, so the complete scope of amendments and every affected provision cannot be determined from the extracted facts alone.

If enacted, title and escrow companies that are primarily acting as escrow agents will generally not have to pay state sales and use tax or business and occupation (B&O) tax on the portion of closing charges that they collect from clients solely to remit to county filing offices for document recordings, as long as those remittance amounts are separately identified on the settlement statement, HUD‑1, or closing disclosure. That change would likely reduce future tax liabilities and the risk of large new assessments for those businesses and ease the financial hardship some faced from recent audits, but the bill text provided does not say whether it cancels or refunds past assessments so that point is uncertain. The bill also clarifies a long list of which activities and fees count as retail sales (and lists some specific exclusions), which will give operators of gyms and fitness facilities, landlords and residential associations, employers, educational institutions, vendors of software and digital goods, and many recreational operators clearer guidance about when they owe tax and when they do not; some of those businesses may see increased tax exposure or need to change how they state charges, while others get explicit exemptions. The act would take effect January 1, 2026, and the provided excerpts leave some implementation details and interactions with other statutes unclear.