This bill creates a new state payroll expense tax and related enforcement, appeals, and fund administration as a new Title 50C RCW. It imposes a 5 percent payroll expense tax beginning July 1, 2026 on calendar-year wages in excess of the minimum wages subject to the federal additional Medicare tax (referencing Treasury Decision 9645, identified here as $125,000). Employers with total employee wages under $7,000,000 in the prior calendar year are exempt, employers may not deduct the tax from employee wages, temporary help firms are treated as the employer for reporting, and the Employment Security Department (department) and its commissioner are designated to administer collection, enforcement, recordkeeping, and confidentiality rules. The bill creates the Well Washington fund account in the state treasury and a 25‑member Well Washington Fund Oversight and Accountability Board to guide and ensure accountability of the fund. Revenue routing is phased: until July 1, 2027 all tax, interest, and penalties go to the state general fund; beginning July 1, 2027, 51 percent of tax revenues must be deposited to the Well Washington fund account and 49 percent (plus interest and penalties) to the state general fund. Eligible uses of the Well Washington fund are limited to higher education, health care (including Medicaid), cash assistance, energy, and housing programs, and funds may be spent only after appropriation. The act establishes administrative and enforcement procedures and penalties administered by the Employment Security Department: employer reporting and remittance requirements, six‑year record retention, treatment of successors on sale or transfer of a business, escalating monetary penalties for willful failure to report ($75, $150, then $250 for subsequent occurrences), a penalty equal to unpaid tax plus interest for willful failure to remit, interest at 1 percent per month on unpaid taxes, preliquidation conference and conciliation requirements in some cases, distraint/seizure and sale procedures, warrants and liens (including filing with county clerk/auditor), injunction authority, compromise authority, and rules for appeals to an administrative law judge and the commissioner with 30‑day filing deadlines and related stay rules. The department may contract with cities to administer a credit for eligible city payroll expense taxes, but the text of the credit provision is incomplete in the available material. Several procedural provisions and some section texts are cut off or not included in the extracted material, so specific administrative details and the concluding language of the city‑tax credit and certain compromise and codification provisions are uncertain.

If enacted, large companies that meet the size tests (more than 20 employees and over $5 million in sales) will begin paying a new 5% payroll expense tax on each worker’s wages above the federal additional Medicare tax threshold (identified as $125,000 by Treasury Decision 9645) starting July 1, 2026. Employers cannot deduct the tax from employee pay and firms with total annual wages under $7 million are exempt; temporary help firms are treated as the employer for workers they place. The Employment Security Department will collect the tax, require six years of records, and has broad enforcement powers (penalties for willful reporting or payment failures, 1% monthly interest, liens, seizure, injunctions, successor liability, and appeal procedures). Revenues go to the state general fund at first, and starting July 1, 2027 are split 51% to a new Well Washington fund (to be used for higher education, Medicaid/health care, cash assistance, and energy and housing programs only after appropriation) and 49% plus interest/penalties to the general fund, with a new oversight board advising the legislature. The groups most affected are large employers, who will face higher labor-related costs, new reporting and recordkeeping obligations, and real risk of aggressive collection actions if they fail to comply; cities that already levy payroll taxes may reduce state liability through a limited credit arrangement but the extract is incomplete about exact credit or refund rules. The state gains a new, restricted funding stream for specified programs but actual spending still needs legislative appropriation and oversight. Important details are missing from the provided text—most notably the finished language on the city tax credit, some administrative remittance instructions, and a few enforcement or refund specifics—so the precise credit limits and some procedural deadlines are unclear.