The bill amends RCW 82.04.4281 (2007 c 54 s 9), changing the business & occupation (B&O) tax treatment of investment income. The title and findings state the bill eliminates the investment income B&O deduction for corporations and other business entities and include legislative findings about lost revenue and intent to close a perceived tax loophole. The amendment text retained in the provided material expressly preserves deductions for amounts derived by individuals, for dividends or capital-account distributions from a parent to a subsidiary, and for interest on loans between parent and subsidiary or between common subsidiaries when total investment and loan income is less than five percent of annual gross receipts. The amendment also revises the definition of "loan" for this section to exclude ownership or trading in publicly traded debt instruments and substantially equivalent private placements, and it shows deletions of prior banking/lending/security business definitions. The bill was read for the first time 01/14/25 and has an effective date of August 1, 2025. This is a tax-law change consisting of deduction and definitional modifications to the B&O tax statute; it is not presented as creating a new crime, changing criminal penalties, or altering criminal procedures in the provided text. It also includes a new legislative findings section. It is unclear from the provided excerpt whether other parts of the bill or other amended sections fully eliminate the deduction for corporations and other business entities as the title asserts, or whether additional new-section language appears elsewhere; the excerpt does not supply supporting data for the monetary assertions in the findings.

If enacted, the bill narrows which investment and intercompany loan receipts can be deducted from the state business and occupation tax by tightening the definition of “loan” (specifically excluding ownership or trading in publicly traded debt and similar private placements) while keeping limited deductions for individuals and for parent–subsidiary payments when investment and loan income is under 5% of gross receipts. The likely practical effect is that many corporations and other business entities that currently claimed the investment-income deduction for revenue tied to publicly traded or equivalent debt instruments would face higher B&O tax bills, and the state would likely collect more revenue that the legislature intends to use for schools and other services. The groups most affected are corporations and other businesses with investment or intercompany loan income, and parent–subsidiary corporate structures; the bill also removes prior statutory language related to banking, lending, and securities businesses, which could reduce those firms’ ability to claim the deduction. The bill takes effect August 1, 2025. Important details are unclear from the provided text — notably whether the deduction is fully eliminated or further limited elsewhere in the bill — and the legislative finding about “hundreds of millions” in lost revenue is an assertion in the bill rather than a documented estimate in the excerpts shown.