This bill creates multiple new tax and local planning tools to preserve and encourage grocery stores in designated “underserved community zones,” and it amends existing municipal business-and-occupation (B&O) taxing authority. It adds a new chapter in Title 84 RCW establishing a local property tax exemption program that cities and counties may adopt by ordinance or resolution, it adds remittance procedures to chapters 82.08 and 82.12 RCW for sales and use tax paid on investigation and security services for qualifying grocery stores, it creates a new credit in chapter 82.04 RCW for grocery store gross income, and it amends RCW 35.102.040 and RCW 35.21.710 to require a model municipal B&O ordinance and to limit local B&O tax rates. The property tax change is a new local option program that allows governing authorities to designate underserved community zones and grant 30-year exemptions for qualifying existing, rehabilitated, or newly constructed grocery store building value (not land and not school district levies). The program requires a public notice and hearing before designation, sets limits on the number of zones per county, prescribes application, approval, conditional-certificate and completion procedures with specific deadlines (cities/counties must act on applications within 90 days; various filing windows of 10–40 days apply), requires annual owner and local reports, and establishes transfer, termination, lien, interest, and appeal procedures including immediate tax liability if eligibility is lost and lien foreclosure treated like delinquent property taxes. The new Title 84 chapter and related sections apply to taxes levied for collection in 2027 and the chapter and tax incentives expire January 1, 2037; the act takes effect January 1, 2027. The bill also changes municipal B&O procedures and limits: the Association of Washington Cities must convene a committee to draft a mandatory model municipal B&O ordinance that cities adopting a local B&O tax must use, with provisions including a credits system, a minimum small business threshold of at least $20,000 gross income, specified reporting and penalty rules, and a prohibition on amending certain definitions more frequently than every four years. RCW 35.21.710 is amended to cap city gross-receipts-based tax rates at .0020 with transitional rules for older rates and reporting requirements to the state auditor. Separately, a new state tax credit equals 0.029 percent of a grocery store’s gross income in an underserved community zone, subject to a statewide $5,000,000 annual cap, first-in-time allocation, carryforward of unused credit for one year, no refunds, and electronic filing requirements; the credit period begins January 1, 2027 and the credit expires January 1, 2037. Some definitions and administrative details are missing from the extracted text: the precise definition of “underserved community zone” referenced in section 305/302 is not included here, the full definition of “rural county” is cut off, and the specific identity of “the department” charged with certain postings, remittance processing, and reporting is not explicitly named in the provided extracts.

If enacted, the bill creates a package of incentives that will make it cheaper for grocery stores in specially designated "underserved community zones" to operate or open. Property owners of existing, rehabilitated, or newly built grocery stores can get a 30-year property tax exemption on qualifying improvements (land still taxed), grocery operators can claim a small gross-income tax credit starting in 2027 (0.029% of grocery gross income) subject to a $5 million statewide annual cap and first-come rules, and qualifying grocery stores can seek full remittance of sales tax paid on investigation and security services. Cities and counties must formally designate zones, run an application and certificate process with set timelines and appeal rights, and report annually to state agencies. Grocery store owners and building owners in the designated zones are the main beneficiaries, but they must apply, meet program rules, and file annual reports or face retroactive tax, penalties, and liens if eligibility is lost or transfers aren’t reported. Local governments will have new responsibilities and administrative costs to run hearings, issue certificates, enforce conditions, and report zone data; they may charge fees to cover those costs. Local property tax revenues will decline for exempted improvements (school district levies are unaffected), and state tax revenue will be reduced up to the $5 million credit cap plus sales tax remittances. Important details needed to determine who exactly qualifies are missing from the provided text, including the full definition of "underserved community zone" and some procedural provisions and the specific department responsible for administering certain parts.