This bill reenacts and amends RCW 82.04.260 and makes multiple other amendments and repeals to Washington tax law to change business and occupation tax classifications, rates, definitions, reporting and payment procedures, and to add or modify certain targeted taxes. It primarily modifies existing tax law rather than creating criminal offenses, and it adds procedural and enforcement provisions (reporting, recordkeeping, prepayments, disclosure requirements) and new or adjusted tax rates for specified activities and taxpayers. Key changes include setting preferential B&O rates and definitions for many manufacturing and service activities (examples shown in the text: 0.138% preferential rates for specified food and wood fuel manufacturing and processing activities; 0.275% for stevedoring and certain international commerce activities; 0.484% or other rates for specified services such as insurance producers and certain nonprofit R&D; 3.3% for low-level waste disposal). The bill sets effective and expiration dates for particular preferences (for example, preferential rates for certain seafood, dairy, and canned/preserved fruits and vegetables begin July 1, 2035; the dairy preference is time-limited through January 1, 2046 with an exclusion for ingredient use on or after July 1, 2023). Aircraft/aerospace manufacturing and tooling provisions retain a graduated rate history and allow a reduction to 0.357% if conditions in RCW 82.04.2602 are met, impose apprenticeship utilization timing, and largely cease to apply after July 1, 2040. Timber provisions include specified rates through July 1, 2045. Many taxpayers under these provisions must file annual tax performance reports under RCW 82.32.534 and sellers claiming out-of-state transport exemptions must maintain records under RCW 82.32.070. The bill also imposes or clarifies other taxes and administrative rules: a 2% tax on premiums/prepayments collected under RCW 48.14.090 with specified prepayment dates and reporting rules; an additional tax on certain financial institutions equal to gross income taxable under RCW 82.04.290(2) multiplied by 1.2% (with a “specified financial institution” defined by consolidated group net income thresholds and disclosure requirements, and penalties for noncompliance referencing RCW 82.32.090(7)); amendment of RCW 82.04.405 to change credit union exemptions beginning October 1, 2025 for certain mergers/acquisitions; changes to RCW 82.04.280 and 82.04.290 including a 0.484% classification for listed activities and rules for broadcaster revenue deductions; amendment to RCW 82.04.390 to clarify that sale-of-real-estate exclusions do not include long-term self-storage rentals; and various deposit, reporting, and rulemaking directions. The act contains a severability clause and specific effective dates: generally January 1, 2026, with Section 101 expiring January 1, 2034, Section 102 effective January 1, 2034, and Sections 301 and 302 effective April 1, 2026. The bill passed the House April 23, 2025, and the Senate April 24, 2025. Relevant statutory cross-references and several provisions are cited in the extracted text, but parts of the act are incomplete or cut off in the provided material. Missing or unclear elements include the full text of subsection (7) of RCW 82.04.260, the specific conditions and text of RCW 82.04.2602 that trigger the 0.357% aerospace rate, the identity of the department referenced in some administrative duties, the remainder of the financial institution definition, and the full texts of other listed amendments and repeals. These gaps prevent a complete accounting of all changes in the bill from the provided extracts.

If enacted, the measure changes which businesses pay lower or higher business-and-occupation tax rates, sets new start and end dates for many of those preferences, and adds new reporting and recordkeeping duties that will change cash flow and compliance costs for affected businesses. Food processors (flour, oil, seafood, dairy, canned or frozen fruits and vegetables), wood biomass and timber businesses, stevedores and international freight agents, aerospace manufacturers, travel agents, insurers, hospitals, and certain waste disposal and storage operators will see specific tax rates clarified or reset, with some preferential rates delayed until 2035 or limited to future sunset dates (for example some dairy preferences run only through 2046 and timber preferences through 2045). Health insurers face a 2 percent tax on premiums with mandatory quarterly prepayments, certain large financial institutions are subject to an added 1.2 percent financial-institution tax and credit unions that merge with banks after October 1, 2025 lose an exemption, and several groups must file annual performance reports or keep records proving goods were shipped out of state, which will increase administrative workload and could shift timing of tax payments into state accounts (general fund, health exchange account, or workforce account as specified). The practical winners are firms that continue to qualify for preferential lower rates; the practical losers are firms facing higher or newly clarified taxes, tighter documentation obligations, or extra prepayment cash demands. State agencies will need to issue rules, notify fiscal committees, collect new reports, and enforce penalties for nondisclosure of affiliate relationships, so the state may see more predictable revenue flows but also higher administrative burdens. Important details that affect exact costs and who ultimately pays—such as the full text of several cross-referenced triggers, the department identified for notices, and the missing subsections and effective-date mechanics—are not present in the extracted facts, so the overall fiscal impact and some compliance obligations remain uncertain.