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With just 10 days left in Washington State’s 2025 legislative session, lawmakers are moving quickly on a flurry of consequential proposals. The pace is frantic. The stakes are high. And nearly every sector—manufacturing, tech, services, real estate, education, and retail—is in the crosshairs.
Here’s what’s been introduced since April 1—and what you need to know now.
🧾 HB 2081 / SB 5815
Rewriting the Rules: New B&O Tax Rates, Surcharges, and Investment Restrictions
The most sweeping overhaul of Washington’s B&O tax structure in more than a decade:
- Raises the service-sector B&O rate (gross >$1M) from 1.75% to 2.1% starting Oct 1, 2025.
- Standardizes nearly all other classifications—retail, manufacturing, childcare, aerospace, etc.—to 0.5% by Jan 1, 2027.
- Imposes a 0.5% surcharge on taxable income over $250M (2026–2030), exempting food, prescription drugs, and manufacturing.
- Increases the financial institutions surcharge from 1.2% to 1.5%.
- Boosts the Advanced Computing Surcharge from 1.22% to 5%, raising the annual cap from $9M to $50M.
- Narrows the investment income deduction to “incidental” holdings (<5% of global gross revenue), while preserving broader exemptions for nonprofits and registered investment funds.
📆 Effective Dates: Rolling implementation starting October 2025; full in effect by 2027.
🖥️ HB 2083 / SB 5814
Digitizing the Sales Tax: Service Expansion and Prepayment Requirement
This bill updates tax policy for Washington’s service- and digital-heavy economy:
- Extends retail sales tax to previously exempt services like IT consulting, custom software, advertising, staffing, and data processing.
- Eliminates exclusions for human-driven or live-interaction digital automated services.
- Expands “tobacco products” to include all nicotine items, including synthetics and cessation aids, under the OTP tax.
- Requires businesses with $3M+ in 2026 retail sales to prepay 80% of their June 2027 sales tax by June 25, 2027—penalties apply for underpayment.
📆 Effective: Oct 1, 2025 (excise); June 2027 (prepayment deadline)
📊 HB 2082 / SB 5813
Capital Gains & Estate Taxes: More Progressive, More Expensive
A deepened capital gains regime paired with revamped estate tax thresholds:
- Adds a 2.9% surtax on capital gains above $1M—bringing the total rate to 9.9%.
- Raises the estate tax exemption from $2.193M to $3M and lifts the top rate from 20% to 35% for estates over $9M.
- Adopts a revised CPI for inflation adjustments, ending the freeze since 2018.
- Applies retroactively to deaths occurring on or after Jan 1, 2025.
📆 Effective: Immediately upon passage; applicable to 2025 tax year
🪙 HB 2084
Carving Back Preferences: Bullion, Storage, and Pharma in the Crosshairs
This narrow-target bill packs a punch:
- Ends B&O exemption for precious metal and monetized bullion.
- Imposes a new B&O tax on self-storage:
- 1.75% standard rate
- 1.5% for entities earning <$1M, with strict affiliate disclosure rules.
- Raises B&O on prescription drug wholesalers from 0.138% to 0.484%.
📆 Effective: Oct 1, 2025 (bullion & pharma); April 1, 2026 (storage)
🍷 HB 2079
Alcohol Tax Overhaul: Every Barrel and Bottle Counts
This bill hikes excise taxes across the board:
- Fortified wine: $0.4688/liter
- Other wine: $0.02/liter
- Cider: $0.0563/liter
- Beer & strong beer: rises from $4 to $9.56/barrel
- Adds surcharges on smaller producers and revenue-sharing with local governments.
📆 Effective: July 1, 2025 (emergency clause invoked)
🏫 SB 5812 / HB 2049
Rewriting Property Tax Growth and School Funding Formulas
An education funding overhaul with far-reaching property tax implications:
- Replaces the 1% levy growth cap with 100% + inflation + population growth (capped at 103%) starting 2026.
- Raises enrichment levy caps and Local Effort Assistance (LEA) thresholds in 2026, 2027, 2030, and 2031.
- Removes the 16% cap on special education enrollment funding.
- Redirects 30% of general apportionment funds for SPED-eligible students directly to special education.
- Establishes a K–12 funding equity workgroup, reporting through 2027 on formula fairness.
📆 Effective: 2026 phase-in; SPED reforms start 2028
🖼️ The Big Picture
None of these bills have passed yet—but every one is active, and many have emerged just in the past two weeks. They could be wrapped into a final budget deal or move swiftly through conference.
What’s clear: these are not routine end-of-session measures. Collectively, they represent a recalibration of Washington’s revenue model.
- High earners, large businesses, and niche industries face increased tax burdens, while public service sectors—especially education—gain funding flexibility.
Now is the time to:
- Monitor these bills closely—they’re moving fast, often without full hearings.
- Communicate with legislators now, before sine die on April 27.
- Prepare internal teams for multi-phase compliance starting as early as July 2025.
The decisions made in the next 10 days will shape Washington’s fiscal direction for the next decade.
Stay informed and involved by joining our Government Action Committee (GAC) meeting next Tuesday, April 22 at 8:00 AM—either in person at the Chamber office on Sprague in Spokane Valley or via Zoom.
