This bill amends RCW 82.45.030 to clarify how the real estate excise tax selling price is calculated when there is a transfer of a controlling interest in an entity that owns or holds an interest in Washington real property. It is a statutory amendment rather than a wholly new chapter, and it changes the valuation procedure used to determine the selling price for these transfers. Under the amendment the selling price for such a transfer is the true and fair value of the in-state real property multiplied by the percentage of the controlling interest being transferred, and if that true and fair value cannot reasonably be determined the selling price is to be determined under subsection (4) of RCW 82.45.030. The bill preserves the chapter’s general definition that “selling price” means true and fair value and the rebuttable presumption that an arm’s-length sale between unrelated parties makes total consideration equal to the price paid or contracted. It specifies that “total consideration paid or contracted to be paid” includes money or anything of value and amounts of liens, mortgages, contract indebtedness, or other encumbrances given to secure or remaining unpaid on the property, but excludes outstanding liens or encumbrances in favor of the United States, the state, or a municipal corporation for taxes, special benefits, or improvements, and excludes relocation assistance in a deed-in-lieu-of-foreclosure transfer. If total consideration cannot be ascertained and true and fair value cannot reasonably be determined, the county property tax roll market value at the time of sale is to be used as the selling price. Effective date is August 1, 2025, and the bill was read for the first time on February 20, 2025. The excerpt does not define key terms used here, including “controlling interest” or the scope of “entity with an interest in real property,” and it does not include any new penalty provisions, tax rates, or administrative procedures beyond the valuation clarifications.

If enacted, the bill changes how real estate excise tax is calculated when someone sells a controlling share in an entity that owns Washington property: instead of looking at the whole transaction amount, the taxable sale price will generally be the in-state property’s fair value multiplied by the percentage of the controlling interest transferred, and where that fair value can’t be reliably determined the county’s assessed market value or other specified methods apply. For buyers and sellers of controlling interests this will likely change the taxable amount they must pay or collect on such transfers, and could lower or raise real estate excise tax bills depending on how much of the entity’s value is tied to Washington real property versus other assets. The parties most affected are entities that own Washington real estate and their buyers/sellers, county assessors (whose tax roll values may be used more often), and the taxpayers who must calculate and pay the tax. The change may reduce some valuation disputes by focusing taxability on the in-state property share, but important details are unclear here — the measure does not define “controlling interest,” “entity,” or how to calculate the percentage transferred — so affected parties may still face uncertainty about how to apply the rule until further guidance or related statute definitions are clarified. The provision would take effect August 1, 2025.