This bill amends existing Washington tax law by changing definitions and deduction rules in RCW 82.04.3651 and RCW 82.04.4282 and by adding a new section stating that RCW 82.32.805 and 82.32.808 do not apply to the act. It expands the statutory definition of "nonprofit organization" to include entities exempt under 26 U.S.C. §501(c)(3), (4), or (10), similar organizations not organized as nonprofit corporations, and organizations that meet three listed criteria about income distribution, reasonable compensation, and limits on political activity. It expands "fund-raising activity" to explicitly include sponsorships, ticket sales, sales of radio and television broadcasting rights, coaching workshops, and similar activities for nonprofits that operate exclusively to manage interscholastic programs for public and private schools, provided all amounts received are used solely to support the nonprofit. The definition of "fund-raising activity" is also clarified to exclude operation of a regular place of business (examples given) and regular provision of services during business hours, with a specified exception for library sales of used information products when proceeds support the library. The amendments to RCW 82.04.4282 list specific items deductible from the measure of tax (for example, initiation fees, dues, contributions, tuition fees, certain trade or professional organization charges, charges for privately operated kindergartens, and endowment funds) and state limits on construing that section: it does not exempt sales of tangible personal property, digital goods/codes/automated services, or facility or service charges for which a special charge is made. For nonprofits that operate exclusively to manage interscholastic programs, "dues" is defined to include membership fees, assessments, or similar amounts received from participating schools or school districts, again conditioned on all proceeds being used solely to support the nonprofit’s purpose. Affected entities include nonprofit organizations (including those referenced to 26 U.S.C. §501(c)(3), (4), or (10)), nonprofits that manage interscholastic programs, libraries under RCW 27.12.010, participating schools and school districts, certain trade and professional organizations, and privately operated kindergartens. The bill imposes requirements that specified amounts be used solely to support the nonprofit, that compensation for services be reasonable under the circumstances, and that qualifying nonprofits not engage in a substantial amount of political activity. The extracted text does not provide an effective date for the amendments, the RCW number for the new section beyond noting its nonapplication language, or any legislative history, fiscal notes, or implementation details.

If enacted, the bill will let more revenue streams for nonprofits—especially organizations that run interscholastic sports or activities for public and private schools—be treated as fundraising or dues when those receipts are used only to support the nonprofit’s mission. Practically, that means sponsorships, ticket sales, sales of radio/TV rights, coaching workshops, and membership fees or assessments charged to participating schools are more clearly eligible for the fundraising/dues treatment that reduces the taxable measure under the cited tax sections, so those organizations and the schools paying them will likely face lower tax exposure on those specific receipts while continuing to pay tax on regular business sales, goods, digital products, and special facility charges. The groups most affected are school-focused nonprofits and the schools or districts that pay them, which could see more money available for programs because certain receipts can be excluded from the tax base; libraries are also protected when selling used information products for library support. The bill leaves some practical questions open—most importantly when the changes take effect and how a few terms are applied—so the timing and exact tax impact could be unclear until those details are established.