The bill repeals RCW 82.04.062 and amends existing business and occupation tax law (RCW 82.04.290) and the definition of sales of real estate (RCW 82.04.390). It adds a savings clause preserving existing rights and proceedings, includes severability and necessity clauses, and sets staggered effective dates (the repeal effective October 1, 2025; the tax and sales-of-real-estate amendments effective April 1, 2026). Substantive tax changes include taxing "qualifying international investment management services" at 0.275% of gross income; imposing a general business tax rate of 1.75% on activities not otherwise taxed, with a reduced 1.5% rate for specified persons (those subject to the RCW 82.04.299 surcharge; businesses with prior-year gross income under $1,000,000 unless aggregated with affiliates to reach $1,000,000 or more; and certain hospitals). The bill requires that 14.3% of revenues collected under the 1.75% rate be deposited into the workforce education investment account (RCW 43.79.195). It taxes persons performing aerospace product development for others at 0.9% of gross income through July 1, 2040, and requires those filers to submit an annual report under RCW 82.32.534. The bill also applies the subsection rates to renters or lessors of individual storage space at self-service storage facilities. Procedural and definitional changes include authorizing the department to require written (including electronic) identification of affiliates or a certification of no affiliates from persons claiming the 1.5% rate, with a 30-day response period. If the department proves by clear, cogent, and convincing evidence that a person intentionally failed to provide complete and accurate information within 30 days, that person becomes ineligible for the 1.5% rate for the current calendar year and the following four calendar years, subject to specified waiver rules. The bill defines "affiliate" and "control" for these purposes, requires taxpayers subject to RCW 82.04.462(4) reconciliation to correct prior reporting when complete prior-year information becomes available, and clarifies that chapter 82.04 does not apply to gross proceeds from real estate sales while excluding rentals or leases of individual storage space for 30 days or longer from the definition of sale of real estate; it also states that this exclusion does not permit deduction of real estate commissions or certain fees and charges. The extracted material does not include the original text of RCW 82.04.062 that is repealed, the statutory definition or text for "qualifying international investment management services," the full definition of "aerospace product development" (cross-referenced to RCW 82.04.4461), or the texts of other referenced provisions (for example RCW 82.04.299, RCW 82.04.462(4), and RCW 82.04.260(10)), so the precise interactions with those provisions and any appropriation or allocation mechanisms tying the tax changes to the bill title's stated funding purposes are not shown in the extracted facts.

If enacted, many businesses will see different business-and-occupation tax rates applied to their gross income: qualifying international investment management services will be taxed at 0.275%, a general 1.75% rate will apply to activities not otherwise taxed (with 14.3% of revenues from that 1.75% rate earmarked for the workforce education investment account), and a 1.5% reduced rate will be available for certain small businesses, entities subject to a surcharge, and hospitals. Aerospace product development performed for others will be taxed at 0.9% through mid-2040 and must file an annual report, and individual self-storage rentals of 30 days or longer are explicitly excluded from being treated as a real estate sale and are brought under the B&O rates instead. The Department of Revenue can require businesses to identify affiliates or certify they have none and can disqualify businesses from the 1.5% rate for up to four years if a taxpayer intentionally fails to respond within 30 days; taxpayers also must correct prior-year reporting when complete information becomes available. Those most affected are investment management firms, aerospace developers, self-storage lessors, hospitals, and small businesses near the $1,000,000 threshold, which will face changed tax bills, new reporting duties, and the risk of multi-year loss of the reduced rate; however, key definitions for some categories and the text repealed by removing RCW 82.04.062 are not included here, so the exact practical impact for entities previously governed by that repealed section is unclear.