Tax preferences

AN ACT Relating to increasing funding for K-12, health care, and 1
public safety by repealing or modifying tax preferences for certain 2
industries and goods; amending RCW 82.04.390, 82.04.460, 82.04.460, 3
and 82.04.272; adding a new section to chapter 82.04 RCW; creating 4
new sections; repealing RCW 82.04.062; providing effective dates; and 5
providing an expiration date. 6
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:7
PART I8
GOLD BULLION AND MONETIZED BULLION9
NEW SECTION. Sec. 101. RCW 82.04.062 ("Sale at wholesale," 10
"sale at retail" excludes sale of precious metal bullion and 11
monetized bullion — Computation of tax) and 1985 c 471 s 5 are each 12
repealed.13
NEW SECTION. Sec. 102. The repeal in section 101 of this act 14
does not affect any existing right acquired or liability or 15
obligation incurred under the statute repealed or under any rule or 16
order adopted under that statute nor does it affect any proceeding 17
instituted under the repealed statute.18
H-2246.2
HOUSE BILL 2084
State of Washington 69th Legislature 2025 Regular Session
By Representatives Ramel, Scott, Macri, Parshley, Berry, Peterson,
and Reed
Read first time 04/17/25. Referred to Committee on Finance.
p. 1 HB 2084
PART II1
STORAGE UNITS2
NEW SECTION. Sec. 201. A new section is added to chapter 82.04 3
RCW to read as follows: 4
(1) Upon every person engaging in this state in the business of 5
renting or leasing individual storage space at self-service storage 6
facilities as defined in RCW 19.150.010, as to such persons the 7
amount of tax with respect to such business is equal to the gross 8
proceeds of the rent or lease multiplied by the following rates:9
(a) 1.75 percent; or 10
(b) 1.5 percent for any person whose gross income of the business 11
subject to the tax imposed under this section for the immediately 12
preceding calendar year, was less than $1,000,000, unless the person 13
is affiliated with one or more other persons, and the aggregate gross 14
income of the business subject to the tax imposed under this section 15
for all affiliated persons was greater than or equal to $1,000,000 16
for the immediately preceding calendar year. 17
(2) The department may require a person claiming to be subject to 18
the 1.5 percent tax rate to identify all the person's affiliates 19
including their department tax registration number or unified 20
business identifier number, as may be applicable, or to certify that 21
the person is not affiliated with any other person. Requests must be 22
in writing and may be made electronically. 23
(3) If the department establishes, by clear, cogent, and 24
convincing evidence, that a person, with intent to evade the 25
additional taxes due under the 1.75 percent tax rate in subsection 26
(1)(a) of this section, failed to provide the department with 27
complete and accurate information in response to a written request 28
under subsection (2) of this section within 30 days of such request, 29
the person is ineligible for the 1.5 percent tax rate in subsection 30
(1)(b) of this section for the entire current calendar year and the 31
following four calendar years. However, the department must waive the 32
provisions of this subsection (3) for any tax reporting period that 33
the person is otherwise eligible for the 1.5 percent tax rate in 34
subsection (1)(b) of this section if: 35
(a) The department has not previously determined that the person 36
failed to fully comply with subsection (2) of this section; and37
(b) Within 30 days of the notice of additional tax due as a 38
result of the person's failure to fully comply with subsection (2) of 39
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this section, the department determines that the person has come into 1
full compliance with subsection (2) of this section.2
(4) For the purposes of subsection (1)(b) of this section, if a 3
taxpayer is subject to the reconciliation provisions of RCW 4
82.04.462(4), and calculates gross income of the business subject to 5
the tax imposed under this section for the immediately preceding 6
calendar year, or aggregate gross income of the business subject to 7
the tax imposed under this section for the immediately preceding 8
calendar year for all affiliated persons, based on incomplete 9
information, the taxpayer must correct the reporting for the current 10
calendar year when complete information for the immediately preceding 11
calendar year is available. 12
(5) For purposes of this section, "affiliate" means a person that 13
directly or indirectly, through one or more intermediaries, controls, 14
is controlled by, or is under common control with another person.15
Sec. 202. RCW 82.04.390 and 1961 c 15 s 82.04.390 are each 16
amended to read as follows: 17
This chapter shall not apply to gross proceeds derived from the 18
sale of real estate. A sale of real estate does not include the gross 19
proceeds derived from individual storage space rentals or leases for 20
30 days or longer. This however, shall not be construed to allow a 21
deduction of amounts received as commissions from the sale of real 22
estate, nor as fees, handling charges, discounts, interest or similar 23
financial charges resulting from, or relating to, real estate 24
transactions. 25
Sec. 203. RCW 82.04.460 and 2023 c 286 s 5 are each amended to 26
read as follows: 27
(1) Except as otherwise provided in this section, any person 28
earning apportionable income taxable under this chapter and also 29
taxable in another state must, for the purpose of computing tax 30
liability under this chapter, apportion to this state, in accordance 31
with RCW 82.04.462, that portion of the person's apportionable income 32
derived from business activities performed within this state.33
(2) The department must by rule provide a method of apportioning 34
the apportionable income of financial institutions, where such 35
apportionable income is taxable under RCW 82.04.290. The rule adopted 36
by the department must, to the extent feasible, be consistent with 37
the multistate tax commission's recommended formula for the 38
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apportionment and allocation of net income of financial institutions 1
as existing on June 1, 2010, or such subsequent date as may be 2
provided by the department by rule, consistent with the purposes of 3
this section, except that: 4
(a) The department's rule must provide for a single factor 5
apportionment method based on the receipts factor; and6
(b) The definition of "financial institution" contained in 7
appendix A to the multistate tax commission's recommended formula for 8
the apportionment and allocation of net income of financial 9
institutions is advisory only. 10
(3) The department may by rule provide a method or methods of 11
apportioning or allocating gross income derived from sales of 12
telecommunications service and competitive telephone service taxed 13
under this chapter, if the gross proceeds of sales subject to tax 14
under this chapter do not fairly represent the extent of the 15
taxpayer's income attributable to this state. The rule must provide 16
for an equitable and constitutionally permissible division of the tax 17
base. 18
(4) For purposes of this section, the following definitions apply 19
unless the context clearly requires otherwise: 20
(a) "Apportionable income" means gross income of the business 21
generated from engaging in apportionable activities, including income 22
received from apportionable activities performed outside this state 23
if the income would be taxable under this chapter if received from 24
activities in this state, less the exemptions and deductions 25
allowable under this chapter. For purposes of this subsection, 26
"apportionable activities" means only those activities taxed under:27
(i) RCW 82.04.255; 28
(ii) RCW 82.04.260 (3), (5), (6), (7), (8), (9), (10), and (13);29
(iii) RCW 82.04.280(1)(e); 30
(iv) RCW 82.04.285; 31
(v) RCW 82.04.286; 32
(vi) RCW 82.04.290; 33
(vii) RCW 82.04.2907; 34
(viii) RCW 82.04.2908; 35
(ix) RCW 82.04.263, but only to the extent of any activity that 36
would be taxable under any of the provisions enumerated under (a)(i) 37
through (viii) of this subsection (4) if the tax classification in 38
RCW 82.04.263 did not exist; ((and))39
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(x) RCW 82.04.280(1)(a) or exempted under RCW 82.04.759, but only 1
with respect to advertising; and2
(xi) Section 201 of this act. 3
(b)(i) "Taxable in another state" means that the taxpayer is 4
subject to a business activities tax by another state on its income 5
received from engaging in apportionable activities; or the taxpayer 6
is not subject to a business activities tax by another state on its 7
income received from engaging in apportionable activities, but any 8
other state has jurisdiction to subject the taxpayer to a business 9
activities tax on such income under the substantial nexus standards 10
in RCW 82.04.067(1). 11
(ii) For purposes of this subsection (4)(b), "business activities 12
tax" and "state" have the same meaning as in RCW 82.04.462.13
Sec. 204. RCW 82.04.460 and 2014 c 97 s 304 are each amended to 14
read as follows: 15
(1) Except as otherwise provided in this section, any person 16
earning apportionable income taxable under this chapter and also 17
taxable in another state must, for the purpose of computing tax 18
liability under this chapter, apportion to this state, in accordance 19
with RCW 82.04.462, that portion of the person's apportionable income 20
derived from business activities performed within this state.21
(2) The department must by rule provide a method of apportioning 22
the apportionable income of financial institutions, where such 23
apportionable income is taxable under RCW 82.04.290. The rule adopted 24
by the department must, to the extent feasible, be consistent with 25
the multistate tax commission's recommended formula for the 26
apportionment and allocation of net income of financial institutions 27
as existing on June 1, 2010, or such subsequent date as may be 28
provided by the department by rule, consistent with the purposes of 29
this section, except that: 30
(a) The department's rule must provide for a single factor 31
apportionment method based on the receipts factor; and32
(b) The definition of "financial institution" contained in 33
appendix A to the multistate tax commission's recommended formula for 34
the apportionment and allocation of net income of financial 35
institutions is advisory only. 36
(3) The department may by rule provide a method or methods of 37
apportioning or allocating gross income derived from sales of 38
telecommunications service and competitive telephone service taxed 39
p. 5 HB 2084
under this chapter, if the gross proceeds of sales subject to tax 1
under this chapter do not fairly represent the extent of the 2
taxpayer's income attributable to this state. The rule must provide 3
for an equitable and constitutionally permissible division of the tax 4
base. 5
(4) For purposes of this section, the following definitions apply 6
unless the context clearly requires otherwise: 7
(a) "Apportionable income" means gross income of the business 8
generated from engaging in apportionable activities, including income 9
received from apportionable activities performed outside this state 10
if the income would be taxable under this chapter if received from 11
activities in this state, less the exemptions and deductions 12
allowable under this chapter. For purposes of this subsection, 13
"apportionable activities" means only those activities taxed under:14
(i) RCW 82.04.255; 15
(ii) RCW 82.04.260 (3), (5), (6), (7), (8), (9), (10), and (13);16
(iii) RCW 82.04.280(1)(e); 17
(iv) RCW 82.04.285; 18
(v) RCW 82.04.286; 19
(vi) RCW 82.04.290; 20
(vii) RCW 82.04.2907; 21
(viii) RCW 82.04.2908; 22
(ix) RCW 82.04.263, but only to the extent of any activity that 23
would be taxable under any of the provisions enumerated under (a)(i) 24
through (viii) of this subsection (4) if the tax classification in 25
RCW 82.04.263 did not exist; ((and))26
(x) RCW 82.04.260(14) and 82.04.280(1)(a), but only with respect 27
to advertising; and28
(xi) Section 201 of this act. 29
(b)(i) "Taxable in another state" means that the taxpayer is 30
subject to a business activities tax by another state on its income 31
received from engaging in apportionable activities; or the taxpayer 32
is not subject to a business activities tax by another state on its 33
income received from engaging in apportionable activities, but any 34
other state has jurisdiction to subject the taxpayer to a business 35
activities tax on such income under the substantial nexus standards 36
in RCW 82.04.067(1). 37
(ii) For purposes of this subsection (4)(b), "business activities 38
tax" and "state" have the same meaning as in RCW 82.04.462.39
p. 6 HB 2084
PART III1
PRESCRIPTION DRUGS2
Sec. 301. RCW 82.04.272 and 2013 c 19 s 127 are each amended to 3
read as follows: 4
(1) Upon every person engaging within this state in the business 5
of warehousing and reselling drugs for human use pursuant to a 6
prescription; as to such persons, the amount of the tax shall be 7
equal to the gross income of the business multiplied by the rate of 8
((0.138)) 0.484 percent. 9
(2) For the purposes of this section: 10
(a) "Prescription" and "drug" have the same meaning as in RCW 11
82.08.0281; and 12
(b) "Warehousing and reselling drugs for human use pursuant to a 13
prescription" means the buying of drugs for human use pursuant to a 14
prescription from a manufacturer or another wholesaler, and reselling 15
of the drugs to persons selling at retail or to hospitals, clinics, 16
health care providers, or other providers of health care services, by 17
a wholesaler or retailer who is registered with the federal drug 18
enforcement administration and licensed by the pharmacy quality 19
assurance commission. 20
NEW SECTION. Sec. 302. Section 301 of this act applies to taxes 21
due for reporting periods beginning on or after the effective date of 22
this section.23
PART IV24
MISCELLANEOUS25
NEW SECTION. Sec. 401. If any provision of this act or its 26
application to any person or circumstance is held invalid, the 27
remainder of the act or the application of the provision to other 28
persons or circumstances is not affected.29
NEW SECTION. Sec. 402. This act is necessary for the support of 30
the state government and its existing public institutions.31
NEW SECTION. Sec. 403. Sections 101, 102, 301, and 302 of this 32
act take effect October 1, 2025.33
p. 7 HB 2084
NEW SECTION. Sec. 404. Sections 201 through 203 of this act 1
take effect April 1, 2026.2
NEW SECTION. Sec. 405. Section 203 of this act expires January 3
1, 2034.4
NEW SECTION. Sec. 406. Section 204 of this act takes effect 5
January 1, 2034.6
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