The bill adds new sections to state law that (1) authorize the Washington horse racing commission to impose reasonable fees to pay federal fees required by the Horseracing Integrity and Safety Act of 2020 and to adopt rules to implement that authority, (2) create a tax credit in chapter 82.04 RCW for persons licensed to conduct race meets equal to amounts they paid in the prior calendar year to the federal Horseracing Integrity and Safety Authority or to the Washington horse racing commission, and (3) create the Washington equine industry federal regulatory account in the state treasury to receive transfers and pay federal HISA fees. The account may receive annual transfers by January 1, 2026, and each January 1 thereafter of up to $1,500,000 per fiscal year derived from state sales and use taxes collected by a class 1 racing association, with the maximum transfer reviewed and adjusted for inflation after each biennium. The tax credit is limited to taxes due under chapter 82.04, may not exceed the tax otherwise due for the reporting period, allows no refunds for unused credits, and requires payment before claiming. To claim the credit an applicant must file an application by January 31 following the calendar year of payments, electronically file required returns and information in an approved format, and retain records the administering department needs to verify eligibility. The Washington horse racing commission must provide payment information to the department on request. Chapter 82.32 RCW governs administration of the credit, but RCW 82.32.805 and 82.32.808 are stated not to apply to this section. Sections 1, 3, and 4 take effect July 1, 2025; section 2 takes effect January 1, 2026. Legally, the bill creates new law sections, establishes a new tax credit (a tax law change), authorizes the commission to impose fees (regulatory authority), creates a dedicated treasury account and an annual transfer mechanism (fiscal procedure), and sets procedural requirements for claiming and administering the credit. It is unclear in the provided text which specific department is meant by the repeated reference to "the department" in section 2 (section 3 explicitly names the department of revenue), and the exact wording of the RCW definitions and of RCW 82.32.805 and 82.32.808 referenced as excluded are not included in the extracted facts.

If enacted, race meet operators licensed in Washington will likely pay federal Horseracing Integrity and Safety Authority fees but can recover those payments as a state retail sales tax credit against their chapter 82.04 tax liability, provided they apply by January 31 after the payment year, file required information electronically, and have tax liability to absorb the credit (unused credit amounts are not refundable). The Washington horse racing commission can also charge fees to cover federal obligations and must share payment information with the department that administers the credit; the commission’s fee revenue and a separate annual transfer from the general fund (up to $1.5 million per fiscal year, starting Jan. 1, 2026 and adjusted for inflation every two years) will be deposited into a new state account that may only be used, after appropriation, to pay the federal authority’s fees. Most immediately affected are licensed race meet operators (who gain a tax offset but face filing and recordkeeping requirements), class 1 racing associations (whose prior-year sales and use tax collections determine the cap on transfers), the horse racing commission (which gains fee authority and reporting duties), and state fiscal offices that must make and track the capped transfers and account expenditures. It is unclear which specific state department is named to process the tax credit in section 2 (section 3 names the department of revenue), and the bill references other RCW definitions and provisions without including their text, so some administrative details and how much revenue is actually available or constrained in practice remain uncertain.