House Bill 1995 (H-1147.3), introduced in the 69th Legislature (2025) by Representative Thomas, would amend and reenact multiple existing tax statutes, repeal a long list of specified RCW sections, and set various effective and expiration dates. The bill substantially revises definitions and tax treatment across the state’s excise tax laws rather than creating a new standalone criminal offense. It notably reenacts and amends RCW 82.04.050 and RCW 82.04.260 and changes many related sections governing sales, manufacturing, and excise taxes. The bill broadens and clarifies the statutory definition of “sale at retail” or “retail sale,” listing many specific inclusions and exclusions: sales of tangible personal property, many forms of services (including professional, business, and personal services), installation and construction services, lodging, automobile towing, digital goods, prewritten software and keys/activation codes, extended warranties (with limits), athletic/fitness facility access and related services, and a large catalog of recreational and entertainment activities. The text expressly includes certain personal service categories (for example tanning, tattoo, and escort/dating services) in the retail-sale definition and provides numerous activity-specific carve-outs and exceptions. It also amends the definition of “to manufacture,” adding and excluding particular activities, and revises which manufacturing activities receive preferential tax rates. RCW 82.04.260 is reenacted and amended to set or continue many industry‑specific tax rates and preferential rates for manufacturing and service activities. Examples in the bill include low preferential rates (0.138%) for specified food and agricultural processing (wheat, barley, soy, canola, sunflower, certain dairy and fruit/vegetable processors subject to date limits and recordkeeping), preferential and tiered rates for aerospace manufacturing and tooling (with complex phased rates, potential reduction to 0.357% subject to conditions, apprenticeship compliance deadlines, and sunsets), stevedoring and international freight activities, timber and wood products (with long-term rate schedules and sunsets), travel agents, and other specific sectors. The bill also imposes or clarifies reporting, recordkeeping, and apportionment rules, filing of annual tax performance reports for many taxpayers, and other procedural requirements. The bill makes additional tax and exemption changes across multiple chapters: it establishes a use tax on natural or manufactured gas when not already taxed, adjusts hazardous substance and petroleum product exemptions (including limited agricultural exemptions), expands or clarifies many leasehold excise tax exemptions (RCW 82.29A.130) for a long list of public, nonprofit, tribal, and stadium or arena leaseholds, and revises real estate excise tax and related exemptions for qualified low‑income housing transfers and transfers of residential property for persons with developmental disabilities (including affidavit, covenant, recapture, timing, and reporting rules). The Washington State Housing Finance Commission must collect data and provide it for a required Joint Legislative Audit and Review Committee review in 2033. The bill text in the provided excerpts is incomplete in places, specific effective and contingent dates and some departmental designations are not shown, and several sections are cut off so additional details and the final structure cannot be confirmed from these excerpts alone.

If enacted, the bill would broaden and clarify what kinds of sales and services are treated as taxable retail sales, explicitly bringing many personal and business services, recreational admissions, digital goods and software access, and certain software keys and codes into the sales-and-use tax base while carving out specific exclusions. It also changes the definition of “to manufacture,” creates or preserves low preferential tax rates for many processing activities (for example certain agricultural and food processing, wood biomass fuel, split dried peas, wholesale meat processing), and adjusts industry-specific tax rates and rules for aerospace tooling and manufacturing, timber activities, travel agents, stevedoring and international freight, low-level waste disposal, and certain insurance and hospital activities; many of these rates have phased dates, reporting and recordkeeping requirements, apprenticeship compliance conditions for reduced aerospace rates, and time-limited sunsets or expirations. The groups most affected are retail and service businesses (including recreational and fitness operators, software and digital goods sellers), food and agricultural processors, timber and wood-product firms, aerospace manufacturers and tooling suppliers, travel and freight services, hospitals and managed care entities, housing nonprofits and qualifying grantees, and state tax and regulatory agencies that will administer reporting, credits, and exemptions. Practical results likely include shifts in tax bills (some firms paying lower preferential rates, others facing a larger taxable base), new or expanded documentation and annual reporting obligations that raise compliance costs, and operational conditions (for example recordkeeping to prove out‑of‑state shipments or meeting apprenticeship targets) that create risks of losing preferential treatment or facing recapture. The excerpts leave some implementation details, exact effective and expiration dates, and the identity of certain administering departments unclear, so the timing and precise scope of impacts cannot be fully determined from the provided text.