The bill creates a new state individual income tax by adding a new Title 82A RCW and related sections. It imposes a tax of 9.90 percent on an individual's “Washington taxable income” beginning January 1, 2028, and establishes many definitions and rules for computing Washington base and Washington taxable income (including conformity to the Internal Revenue Code as of January 1, 2026). The act also authorizes a 9.90 percent electing pass-through entity tax beginning January 1, 2028, with an annual election by the entity, estimated payment requirements, and a credit to owners for their share of entity-paid tax. Tax revenue is to be split so 5 percent goes to a newly created county public defense funding stabilization account and the remainder to the state general fund for specified purposes (including sales and use tax relief, expansion of the working families' tax credit, and business and occupation tax relief as referenced in the act). The bill creates numerous substantive and procedural tax rules: a package of credits (including credits for income also subject to chapters 82.04 or 82.16, for Washington capital gains, and for pass-through entity tax paid), large standard and charitable deductions ($1,000,000 standard deduction per individual, $50,000 cap on charitable deductions), rules for allocating and apportioning nonresidents’ income (including duty‑day apportionment for professional athletes, receipts-factor apportionment for business income, and special rules for student-athlete name/image/likeness and institutional revenue), and detailed filing, estimated payment, electronic filing/payment, accounting method, and audit procedures. The department is given rulemaking authority and must publish indexed deduction amounts; estimated payment rules and many amendments to interest and penalty calculations are included. Criminal penalties are added: knowingly attempting to evade the tax or failing to account for or pay collected tax is a class C felony; certain failures to pay or file can be gross misdemeanors; various civil penalties for underpayments, late payments, and other violations are specified or amended. The act also amends retirement and benefit statutes to preserve many existing exemptions from execution and garnishment but explicitly states those retirement benefits are not exempt from tax under the new Title 82A RCW; it permits the Department of Retirement Systems to comply with specified child support and court orders. It expands and funds a refundable working families' tax credit (with specified refund amounts for 2023 and thereafter and administrative rules for applications and audits), exempts sales and use tax on defined “grooming and hygiene products” beginning January 1, 2029, creates the county public defense funding stabilization account with OFM and treasurer duties, and temporarily imposes a 0.5 percent surcharge on Washington taxable income over $250,000,000 effective January 1, 2026 through December 31, 2028. Important statutory text is missing from the extracted material (for example, full texts of sections referenced for federal AGI modifications, details of sections 203 and 502, exact formulas for some remittance reductions, and some penalty/interest computations), so some implementation details and precise allocations described by cross-references in the act cannot be confirmed from these excerpts.

If enacted, Washington would create a new individual income tax at 9.90% effective for tax years beginning Jan. 1, 2028, with 5% of receipts earmarked for a newly created county public defense funding stabilization account (distributed quarterly to counties by the state treasurer using OFM personal income ratios) and the remainder deposited in the state general fund to pay for specified sales/use tax relief, an expanded working families’ tax credit, and business and occupation tax relief. Pass-through entities may elect an entity-level 9.90% tax on their taxable income starting Jan. 1, 2028 (with estimated payment rules, credits passed to owners, and reporting requirements); the bill also expands a refundable working families’ credit, exempts common “grooming and hygiene products” from sales/use tax starting Jan. 1, 2029, raises certain B&O credit amounts, and explicitly makes retirement benefits subject to the new Title 82A tax even while preserving other legal protections and allowable deductions. The people and organizations most affected will be high-income Washington residents (new direct tax liability and a temporary 0.5% surcharge on income over $250 million for 2026–28), owners of pass-through entities (who must decide whether to elect the entity-level tax and follow new estimated-payment and filing rules), counties (which gain a new, formula-driven revenue stream for public defense), lowand middle-income households (likely to receive larger refundable credits and some sales tax relief), and state agencies (Department of Revenue, OFM, State Treasurer, Department of Retirement Systems) that will take on new administration, rulemaking, collection, distribution, and reporting responsibilities. Compliance costs, increased withholding/estimated-payment activity, and tougher penalty and criminal provisions raise the risk and administrative burden for taxpayers and for the Department of Revenue; important technical details needed to determine exact tax bases, credit limits, and some allocation rules are missing from the provided text, so precise taxpayer liabilities and program mechanics remain uncertain.