The act amends RCW 82.04.320 to make chapter 82.04 (the business and occupation tax) not apply to gross premiums and prepayments received by a person when that same person paid Washington insurance premium taxes under chapters 48.14, 48.15, or 48.201 RCW. It expressly includes surplus line insurance brokers who pay premium taxes under chapter 48.15 as "persons" for this purpose and adopts the definition of "premium" found in RCW 48.18.170. The bill also treats eligible captive insurers as having paid a premium tax for periods preceding May 12, 2021, exempts eligible captive insurers affiliated with a public institution of higher education who are exempt under RCW 48.201.040 from chapter 82.04 tax on their insurance business, and repeals RCW 82.04.322 (the prior exemption provision for health maintenance organizations, health care service contractors, and certified health plans). This is a modification of existing tax law that creates or clarifies exemptions and tax-treatment rules rather than creating new crimes or changing criminal penalties. Section 2 of the act applies prospectively and retroactively to tax periods beginning on or after October 2, 2019, and the act preserves any final court judgments entered before the effective date of that section. The Department of Revenue and insurers, captive insurers, surplus line brokers, and entities previously covered by the repealed RCW are the primary affected parties referenced. Important specifics are not included in the extracted text: the bill chunk does not supply an explicit future effective date beyond the stated retroactivity to October 2, 2019; the full statutory definitions for "eligible captive insurer," the exemption under RCW 48.14.0201(6), and the statutory meaning of "premium" (from RCW 48.18.170) are not provided here; and the content of the repealed RCW 82.04.322 is not shown.

If enacted, businesses that receive insurance premiums and already pay state premium taxes would generally no longer also owe Washington’s business and occupation tax on those same premium receipts, reducing their tax burden and the risk of double taxation; surplus line brokers are explicitly included and eligible captive insurers — including those tied to public institutions of higher education — would be treated as having paid premium taxes for certain past periods and therefore exempt from the B&O tax, which could lead to lower ongoing costs and possible refunds or reduced liabilities going back to October 2, 2019 (with special treatment noted for periods before May 12, 2021). The Department of Revenue will likely need to update guidance and handle adjustments, audits, or enforcement actions, and insurers and captive entities will need to pursue or process any claim or accounting changes. Most affected are insurers, surplus line brokers, eligible captive insurers (especially those affiliated with public higher education), and health plan entities impacted by the repeal of the prior exemption statute; they should expect reduced tax payments or the opportunity to seek retroactive adjustments, but the precise scope for captive insurer definitions, the exact exemption removed by the repealed provision, and the bill’s final effective date beyond its retroactivity to October 2, 2019 are not fully clear from the provided text.