Creating a business and occupation tax deduction and increasing the rate for persons conducting payment card processing activities.

SB 5777 creates a tax deduction for payment card processors in Washington, allowing them to subtract interchange fees and network fees from their business and occupation tax base. The bill also increases the tax rate for these processors, establishing a 1.5% rate for businesses with less than $1 million in annual revenue and a 1.75% rate for others. This directly affects companies that process electronic payments for merchants, such as credit and debit card transactions. The deduction is intended to address the unique fee structure of payment processing activities.