Advanced computing surcharge

AN ACT Relating to increasing the investments in our workforce by 1
amending the advanced computing surcharge; reenacting and amending 2
RCW 82.04.299; creating a new section; and providing an effective 3
date. 4
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:5
NEW SECTION. Sec. 1. The legislature finds that Washington is 6
facing a critical workforce gap in an economy where the state is 7
poised to see growing demand for eligible employees trained in a 8
variety of industry sectors, including advanced computing and 9
technology, construction and skilled trades, health care, education, 10
business and management, and clean technology. According to a 2024 11
report published by the Washington roundtable, the state's 12
anticipated job growth is 12.8 percent, well above the national 13
average of 2.8 percent, creating opportunity for skilled workers. 14
Three quarters of jobs will require postsecondary credentials. 15
However, Washington faces a projected shortfall of nearly 600,000 16
credentialed workers over the decade, including 301,000 with 17
bachelor's and advanced degrees, 67,000 with associate degrees, and 18
228,000 with certifications, apprenticeships, and other training 19
credentials.20
H-1081.3
HOUSE BILL 1839
State of Washington 69th Legislature 2025 Regular Session
By Representatives Reed, Pollet, Berg, Parshley, Scott, Ormsby, and
Hill
Read first time 02/05/25. Referred to Committee on Finance.
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Therefore, the legislature finds it necessary to grow investments 1
in workforce education and finds that additional resources would be 2
best guided towards expanding the Washington college grant program to 3
families earning 70 percent of the median family income, increasing 4
the number of teacher training and STEM teacher training programs, 5
growing the number of in-state student seats in our institutions of 6
higher education, and funding work-study salaries for students doing 7
STEM research. 8
Sec. 2. RCW 82.04.299 and 2022 c 170 s 1 and 2022 c 56 s 4 are 9
each reenacted and amended to read as follows: 10
(1)(a) Beginning with business activities occurring on or after 11
April 1, 2020, in addition to the taxes imposed under RCW 12
82.04.290(2), a workforce education investment surcharge is imposed 13
on select advanced computing businesses. The surcharge is equal to 14
the gross income of the business subject to the tax under RCW 15
82.04.290(2), multiplied by the rate of 1.22 percent.16
(b) ((Except as provided in (e) of this subsection (1), in no 17
case will the combined surcharge imposed under this subsection (1) 18
paid by all members of an affiliated group be more than nine million 19
dollars annually.20
(c))) For persons subject to the surcharge imposed under this 21
subsection (1) that report under one or more tax classifications, the 22
surcharge applies only to business activities taxed under RCW 23
82.04.290(2). 24
(((d))) (c) The surcharge imposed under this subsection (1) must 25
be reported and paid on a quarterly basis in a manner as required by 26
the department. Returns and amounts payable under this subsection (1) 27
are due by the last day of the month immediately following the end of 28
the reporting period covered by the return. All other taxes must be 29
reported and paid as required under RCW 82.32.045.30
(((e))) (d)(i) To aid in the effective administration of the 31
surcharge in this subsection (1), the department may require persons 32
believed to be engaging in advanced computing or affiliated with a 33
person believed to be engaging in advanced computing to disclose 34
whether they are a member of an affiliated group and, if so, to 35
identify all other members of the affiliated group subject to the 36
surcharge. 37
(ii) If the department establishes, by clear, cogent, and 38
convincing evidence, that one or more members of an affiliated group, 39
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with intent to evade the surcharge under this subsection (1), failed 1
to fully comply with this subsection (1)(((e))) (d), the department 2
must assess against that person, or those persons collectively, a 3
penalty equal to ((fifty)) 50 percent of the amount of the total 4
surcharge payable by all members of that affiliated group for the 5
calendar year during which the person or persons failed to fully 6
comply with this subsection (1)(((e))) (d). The penalty under this 7
subsection (1)(((e))) (d) is in lieu of and not in addition to the 8
evasion penalty under RCW 82.32.090(7). 9
(((f))) (e) For the purposes of this subsection (1) the following 10
definitions apply: 11
(i) "Advanced computing" means designing or developing computer 12
software or computer hardware, whether directly or contracting with 13
another person, including: Modifications to computer software or 14
computer hardware; cloud computing services; or operating as a 15
marketplace facilitator as defined by RCW 82.08.0531, an online 16
search engine, or online social networking platform;17
(ii) "Affiliate" and "affiliated" means a person that directly or 18
indirectly, through one or more intermediaries, controls, is 19
controlled by, or is under common control with another person;20
(iii) "Affiliated group" means a group of two or more persons 21
that are affiliated with each other; 22
(iv) "Cloud computing services" means on-demand delivery of 23
computing resources, such as networks, servers, storage, 24
applications, and services, over the internet; 25
(v) "Control" means the possession, directly or indirectly, of 26
more than ((fifty)) 50 percent of the power to direct or cause the 27
direction of the management and policies of a person, whether through 28
the ownership of voting shares, by contract, or otherwise; and29
(vi) "Select advanced computing business" means a person who is a 30
member of an affiliated group with at least one member of the 31
affiliated group engaging in the business of advanced computing, and 32
the affiliated group has worldwide gross revenue of more than 33
((twenty-five billion dollars )) $25,000,000,000 during the 34
immediately preceding calendar year. A person who is primarily 35
engaged within this state in the provision of commercial mobile 36
service, as that term is defined in 47 U.S.C. Sec. 332 (d)(1), shall 37
not be considered a select advanced computing business. A person who 38
is primarily engaged in this state in the operation and provision of 39
access to transmission facilities and infrastructure that the person 40
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owns or leases for the transmission of voice, data, text, sound, and 1
video using wired telecommunications networks shall not be considered 2
a select advanced computing business. A person that is primarily 3
engaged in business as a "financial institution" as defined in RCW 4
82.04.29004, as that section existed on January 1, 2020, shall not be 5
considered a select advanced computing business. For purposes of this 6
subsection (1)(((f))) (e)(vi), "primarily" is determined based on 7
gross income of the business. 8
(2)(a) The workforce education investment surcharge under this 9
section does not apply to: 10
(i) Any hospital as defined in RCW 70.41.020, including any 11
hospital that comes within the scope of chapter 71.12 RCW if the 12
hospital is also licensed under chapter 70.41 RCW; or13
(ii) A provider clinic offering primary care, multispecialty and 14
surgical services, including behavioral health services, and any 15
affiliate of the provider clinic if the affiliate is an organization 16
that offers health care services or provides administrative support 17
for a provider clinic, or is an independent practice association or 18
accountable care organization. 19
(b) The exemptions under this subsection (2) do not apply to 20
amounts received by any member of an affiliated group other than the 21
businesses described in (a) of this subsection. 22
(c) For purposes of the exemption in (a)(ii) of this subsection:23
(i) "Health care services" means services offered by health care 24
providers relating to the prevention, cure, or treatment of illness, 25
injury, or disease. 26
(ii) "Primary care" means wellness and prevention services and 27
the diagnosis and treatment of health conditions. 28
(3) Revenues from the surcharge under this section must be 29
deposited directly into the workforce education investment account 30
established in RCW 43.79.195. 31
(4) The department has the authority to determine through an 32
audit or other investigation whether a person is subject to the 33
surcharge imposed in this section. 34
NEW SECTION. Sec. 3. This act takes effect October 1, 2025.35
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