HB 2047 phases out the Washington employee ownership program. It shortens the period during which businesses can earn tax credits for converting to worker-owned cooperatives, employee ownership trusts, or employee stock ownership plans, moving the deadline for earning credits from June 30, 2029, to June 30, 2025. The bill also makes the program's activities, such as providing technical support and referrals, contingent upon specific funding appropriations. The tax credit provisions are set to expire earlier, effectively eliminating these incentives for businesses.
HB 1210 modifies existing targeted urban area tax preferences, primarily to include "clean energy transformation businesses." The bill defines these businesses as those involved in nuclear operations, green or renewable hydrogen production equipment, or high-voltage energy storage equipment. It allows cities to grant these specific businesses up to two additional 24-month extensions to complete projects under the tax preferences, beyond the standard extension period. Additionally, the bill updates the requirements for receiving an exemption, emphasizing verification of community workforce agreements, post-construction family living wage jobs, and compliance with prevailing wage and apprentice standards during construction.
HB 2027 increases real estate transfer taxes on property sales above specific thresholds to fund affordable housing programs. The tax applies at 1.1% for sales under $500,000, 1.28% for $500,000-$1.5 million, 2.75% for $1.5-$3 million, and 3% for sales over $3 million. Revenue from these taxes will support state housing programs targeting low- and middle-income households, including seniors, veterans, farmworkers, and others facing housing insecurity. The bill aims to build over 500,000 new affordable homes for residents earning under 50% of area median income by addressing supply shortages.
House Bill 2081 modifies Washington's business and occupation (B&O) tax structure, affecting various businesses operating in the state. It increases B&O tax rates for several business activities, including extraction, manufacturing, retail sales, and digital goods. The bill also establishes a temporary B&O tax surcharge for large companies with annual revenues exceeding $250 million. Additionally, it clarifies the B&O tax deduction available for certain business investments.
HB 1641 amends Washington State's definition of "timberland" for real property excise tax purposes. It expands the definition to include land transferred to governmental entities that manage it like designated forestland under state law, in addition to land classified under existing timberland rules. This change means sales of timberland (including certain government-managed land) will be taxed at a flat 1.28% rate, rather than potentially higher rates for other property types. The bill directly affects property sellers and governmental entities managing timberland, ensuring consistent tax treatment for qualifying land sales.
HB 1040 allows people eligible for Washington’s property tax exemption programs (for seniors or disabled residents) to exclude up to $6,000 annually in rental income from their primary residence when calculating income eligibility for the exemption. This applies only to long-term rentals (not short-term rentals like Airbnb, which must still be reported as taxable income). The bill amends existing tax code to include rental income as part of "combined disposable income" calculations, adjusting how income thresholds are applied. It directly affects low-income homeowners in qualifying exemption programs who rent out space in their primary home.
HB 1340 would exempt most prepared food from Washington's sales tax, directly affecting restaurants, food trucks, and businesses selling meals prepared for immediate consumption. The bill defines "prepared food" as food sold heated, with utensils provided (like plates or cutlery), or mixed by the seller (excluding simple cuts or raw ingredients needing home cooking). It excludes soft drinks, bottled water, dietary supplements, alcoholic beverages, tobacco, and cannabis from the exemption. This change would reduce sales tax for qualifying food items sold by businesses meeting the defined criteria, but not for packaged snacks, drinks, or other excluded products.
HB 1375 adjusts Washington's estate tax exclusion amount annually for inflation, directly affecting Washington residents whose estates exceed the exclusion threshold. Starting August 1, 2025, the exclusion amount (currently $2,959,000) will automatically increase each year based on the Seattle-area consumer price index, calculated by multiplying the base amount by (1 + inflation percentage) and rounding to the nearest $1,000. This change ensures the exclusion keeps pace with rising costs, preventing unintended tax increases for estates of decedents dying in 2026 and beyond. The bill takes effect August 1, 2025, and applies to Washington residents' taxable estates.
HB 1150 requires producers of consumer packaging and paper products to fund and manage recycling programs, shifting responsibility from taxpayers to manufacturers. It aims to improve recycling access - especially for rural residents and multi-family housing - by mandating producer-funded curbside collection systems and setting statewide collection and composting targets. The bill defines "covered materials" (like plastic, paper, metal packaging) and exempts certain items (e.g., infant formula packaging), while creating an advisory council to oversee implementation. Producers must meet specific collection rate goals, with smaller businesses qualifying for de minimis exemptions based on revenue thresholds. The law preserves local government authority over waste management but requires producers to integrate into existing recycling infrastructure.
HB 2026, the "Fairness in Education Funding Act," aims to create equitable school funding by replacing local levies (which disproportionately benefit wealthier districts) with uniform state-funded allocations. The bill sets new minimum state salary levels for school staff that will apply equally to all public school districts, charter schools, and state-tribal education compact schools starting in the 2026-27 school year. Specifically, it establishes baseline salaries of $100,033 (adjusted for inflation) for certificated instructional staff, $179,857 for certificated administrative staff, and $71,082 for classified staff. Regional adjustments to these salaries will phase out after the 2025-26 school year, ensuring all districts receive identical state funding for staff compensation regardless of location or local wealth.
