This bill creates a new local-option special excise tax on the sale or charge for furnishing lodging by short-term rentals facilitated through short-term rental platforms. The new tax is added as a section in chapter 82.02 RCW, may be imposed by counties, cities, and towns at a rate up to 4% in increments of at least 1%, may not be imposed before April 1, 2026, and is to be collected by "the department" on behalf of jurisdictions at no cost to them. A county ordinance or resolution must allow a credit for the full amount of any city or town tax on the same transaction. The bill directs that revenue be deposited monthly into a newly created "essential affordable housing local assistance account" in the state treasury and limits uses to acquiring, rehabilitating, constructing, operating, and maintaining affordable or workforce housing (including supportive housing), providing rental assistance, and funding social service and nonprofit organizations that provide housing-related services. Jurisdictions may retain up to 15% annually for administrative costs, may enter interlocal agreements for projects, must publish an annual public report by March 1 after the first year of collections, and the account may be used only for monthly distributions to jurisdictions and for tax refunds under this authority. Administrative provisions in chapters 82.08, 82.12, and 82.32 RCW apply to the new tax to the extent relevant. The bill also amends existing law: it revises RCW 67.28.181 to restate municipal lodging excise tax rules and caps (noting a general rate cap described as the lesser of 2% or a combined rate equaling 12% in specified circumstances) and it amends RCW 82.14.410 to require exemptions in local sales and use tax changes for lodging sales that would otherwise push total sales tax rates above certain historical thresholds and to revise the definition of "total sales tax rate" to exclude this new tax and taxes under RCW 82.14.530. This is primarily a new tax and administrative and revenue-use law; it does not state changes to criminal penalties. The bill references definitions in RCW 64.37.010 and other statutes, but the identity of "the department," the distribution formulas or allocation criteria from the new account, and the referenced definitions and broader statutory context are not specified in the extracted material.

If enacted, counties, cities, and towns would be able to add a new local excise tax of up to 4% (in 1% steps) on short-term rentals booked through platforms, with the state tax department collecting the money for them at no cost and depositing proceeds into a statewide "essential affordable housing local assistance account" for monthly distribution. Local governments must adopt a resolution of intent (simple majority) and cannot start collecting before April 1, 2026; they may keep up to 15% of collections for administrative costs, must publish an annual spending report by March 1 after the first year of collections, and can form interlocal agreements to fund projects. The most affected groups are local governments (new revenue and new reporting responsibilities), short-term rental operators and platforms (a new excise tax on their transactions), and social service and nonprofit housing providers (new restricted funding for housing acquisition, operations, rental assistance, and related services). The bill does not name which state department will collect the tax, nor does it specify how distribution amounts will be allocated among jurisdictions, so important implementation details remain unclear.