Imposing a business and occupation tax on state-chartered credit unions that merge with a commercial bank.

HB 1506 would require state-chartered credit unions in Washington that merge with a commercial bank to pay a business and occupation tax starting October 1, 2025. Currently, these credit unions are exempt from this tax under state law, but the bill removes that exemption for any credit union that merges with a bank regulated by the Department of Financial Institutions. The tax would equal 1.2% of the credit union's gross income, applying only to merged entities. This change directly affects credit unions that choose to merge with commercial banks, shifting their tax obligation from exemption to a standard 1.2% rate.