Grocery store incentives

AN ACT Relating to incentivizing grocery stores located in 1
underserved communities; amending RCW 35.102.040 and 82.04.050; 2
adding new sections to chapter 82.04 RCW; adding a new chapter to 3
Title 84 RCW; creating new sections; providing an effective date; and 4
providing expiration dates. 5
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:6
NEW SECTION. Sec. 1. (1) The legislature finds that access to 7
affordable, nutritious, and culturally relevant food is essential to 8
health, economic stability, and community well-being. Yet many 9
Washington residents, particularly low-income households, communities 10
of color, rural residents, immigrants and refugees, and people with 11
limited transportation options continue to face barriers to food 12
access due to store closures, uneven infrastructure, and long-13
standing patterns of disinvestment.14
(2) It is the intent of the legislature to provide locally 15
controlled tools to preserve existing grocery stores and support the 16
development and retention of grocery stores in underserved 17
communities where market forces alone have not met community needs. 18
By reducing structural cost barriers, this act is intended to 19
strengthen community-serving food retailers and support local jobs 20
and neighborhood stability. The legislature further intends that 21
H-2603.2
HOUSE BILL 2297
State of Washington 69th Legislature 2026 Regular Session
By Representatives Farivar, Mena, Berry, Parshley, Ryu, Tharinger,
Reeves, Reed, Cortes, Street, Kloba, Scott, Thomas, Taylor, Doglio,
Stonier, Morgan, Gregerson, Ormsby, Fosse, Hill, Pollet, Bernbaum,
Salahuddin, and Timmons
Prefiled 01/07/26. Read first time 01/12/26. Referred to Committee
on Finance.
p. 1 HB 2297
these incentives be implemented in a manner responsive to local 1
conditions and as part of a broader effort to promote health equity, 2
economic justice, and long-term community stability.3
PART I4
Sec. 101. RCW 35.102.040 and 2010 c 271 s 706 are each amended 5
to read as follows: 6
(1)(a) The cities, working through the association of Washington 7
cities, shall form a model ordinance development committee made up of 8
a representative sampling of cities that as of July 27, 2003, impose 9
a business and occupation tax. This committee shall work through the 10
association of Washington cities to adopt a model ordinance on 11
municipal gross receipts business and occupation tax. The model 12
ordinance and subsequent amendments shall be adopted using a process 13
that includes opportunity for substantial input from business 14
stakeholders and other members of the public. Input shall be 15
solicited from statewide business associations and from local 16
chambers of commerce and downtown business associations in cities 17
that levy a business and occupation tax. 18
(b) The department of commerce shall contract to post the model 19
ordinance on an internet website and to make paper copies available 20
for inspection upon request. The department of revenue and the 21
department of licensing shall post copies of or links to the model 22
ordinance on their internet websites. Additionally, a city that 23
imposes a business and occupation tax must make copies of its 24
ordinance available for inspection and copying as provided in chapter 25
42.56 RCW. 26
(c) The definitions and tax classifications in the model 27
ordinance may not be amended more frequently than once every four 28
years, however the model ordinance may be amended at any time to 29
comply with changes in state law. Any amendment to a mandatory 30
provision of the model ordinance must be adopted with the same 31
effective date by all cities. 32
(2) A city that imposes a business and occupation tax must adopt 33
the mandatory provisions of the model ordinance. The following 34
provisions are mandatory: 35
(a) A system of credits that meets the requirements of RCW 36
35.102.060 and a form for such use; 37
p. 2 HB 2297
(b) A uniform, minimum small business tax threshold of at least 1
the equivalent of twenty thousand dollars in gross income annually. A 2
city may elect to deviate from this requirement by creating a higher 3
threshold or exemption but it shall not deviate lower than the level 4
required in this subsection. If a city has a small business threshold 5
or exemption in excess of that provided in this subsection as of 6
January 1, 2003, and chooses to deviate below the threshold or 7
exemption level that was in place as of January 1, 2003, the city 8
must notify all businesses licensed to do business within the city at 9
least one hundred twenty days prior to the potential implementation 10
of a lower threshold or exemption amount; 11
(c) Tax reporting frequencies that meet the requirements of RCW 12
35.102.070; 13
(d) Penalty and interest provisions that meet the requirements of 14
RCW 35.102.080 and 35.102.090; 15
(e) Claim periods that meet the requirements of RCW 35.102.100;16
(f) Refund provisions that meet the requirements of RCW 17
35.102.110; and 18
(g) Definitions, which at a minimum, must include the definitions 19
enumerated in RCW 35.102.030 and 35.102.120. The definitions in 20
chapter 82.04 RCW shall be used as the baseline for all definitions 21
in the model ordinance, and any deviation in the model ordinance from 22
these definitions must be described by a comment in the model 23
ordinance. 24
(3) Except for the deduction required by RCW 35.102.160 and the 25
system of credits developed to address multiple taxation under 26
subsection (2)(a) of this section, a city may adopt its own 27
provisions for tax exemptions, tax credits, preferential rates, and 28
tax deductions. 29
(4) Any city that adopts an ordinance that deviates from the 30
nonmandatory provisions of the model ordinance shall make a 31
description of such differences available to the public, in written 32
and electronic form. 33
PART II34
Sec. 201. RCW 82.04.050 and 2025 c 422 s 101 are each amended to 35
read as follows: 36
(1)(a) "Sale at retail" or "retail sale" means every sale of 37
tangible personal property (including articles produced, fabricated, 38
p. 3 HB 2297
or imprinted) to all persons irrespective of the nature of their 1
business and including, among others, without limiting the scope 2
hereof, persons who install, repair, clean, alter, improve, 3
construct, or decorate real or personal property of or for consumers 4
other than a sale to a person who: 5
(i) Purchases for the purpose of resale as tangible personal 6
property in the regular course of business without intervening use by 7
such person, but a purchase for the purpose of resale by a regional 8
transit authority under RCW 81.112.300 is not a sale for resale; or9
(ii) Installs, repairs, cleans, alters, imprints, improves, 10
constructs, or decorates real or personal property of or for 11
consumers, if such tangible personal property becomes an ingredient 12
or component of such real or personal property without intervening 13
use by such person; or 14
(iii) Purchases for the purpose of consuming the property 15
purchased in producing for sale as a new article of tangible personal 16
property or substance, of which such property becomes an ingredient 17
or component or is a chemical used in processing, when the primary 18
purpose of such chemical is to create a chemical reaction directly 19
through contact with an ingredient of a new article being produced 20
for sale; or 21
(iv) Purchases for the purpose of consuming the property 22
purchased in producing ferrosilicon which is subsequently used in 23
producing magnesium for sale, if the primary purpose of such property 24
is to create a chemical reaction directly through contact with an 25
ingredient of ferrosilicon; or 26
(v) Purchases for the purpose of providing the property to 27
consumers as part of competitive telephone service, as defined in RCW 28
82.04.065; or 29
(vi) Purchases for the purpose of satisfying the person's 30
obligations under an extended warranty as defined in subsection (7) 31
of this section, if such tangible personal property replaces or 32
becomes an ingredient or component of property covered by the 33
extended warranty without intervening use by such person.34
(b) The term includes every sale of tangible personal property 35
that is used or consumed or to be used or consumed in the performance 36
of any activity defined as a "sale at retail" or "retail sale" even 37
though such property is resold or used as provided in (a)(i) through 38
(vi) of this subsection following such use. 39
p. 4 HB 2297
(c) The term also means every sale of tangible personal property 1
to persons engaged in any business that is taxable under RCW 2
82.04.280(1) (a), (b), and (((g))) (f), 82.04.290, and 82.04.2908.3
(2) The term "sale at retail" or "retail sale" includes the sale 4
of or charge made for tangible personal property consumed and/or for 5
labor and services rendered in respect to the following:6
(a) The installing, repairing, cleaning, altering, imprinting, or 7
improving of tangible personal property of or for consumers, 8
including charges made for the mere use of facilities in respect 9
thereto, but excluding charges made for the use of self-service 10
laundry facilities, and also excluding sales of laundry service to 11
nonprofit health care facilities, and excluding services rendered in 12
respect to live animals, birds and insects; 13
(b) The constructing, repairing, decorating, or improving of new 14
or existing buildings or other structures under, upon, or above real 15
property of or for consumers, including the installing or attaching 16
of any article of tangible personal property therein or thereto, 17
whether or not such personal property becomes a part of the realty by 18
virtue of installation, and also includes the sale of services or 19
charges made for the clearing of land and the moving of earth 20
excepting the mere leveling of land used in commercial farming or 21
agriculture; 22
(c) The constructing, repairing, or improving of any structure 23
upon, above, or under any real property owned by an owner who conveys 24
the property by title, possession, or any other means to the person 25
performing such construction, repair, or improvement for the purpose 26
of performing such construction, repair, or improvement and the 27
property is then reconveyed by title, possession, or any other means 28
to the original owner; 29
(d) The cleaning, fumigating, razing, or moving of existing 30
buildings or structures, but does not include the charge made for 31
janitorial services; and for purposes of this section the term 32
"janitorial services" means those cleaning and caretaking services 33
ordinarily performed by commercial janitor service businesses 34
including, but not limited to, wall and window washing, floor 35
cleaning and waxing, and the cleaning in place of rugs, drapes and 36
upholstery. The term "janitorial services" does not include painting, 37
papering, repairing, furnace or septic tank cleaning, snow removal or 38
sandblasting; 39
p. 5 HB 2297
(e) Automobile towing and similar automotive transportation 1
services, but not in respect to those required to report and pay 2
taxes under chapter 82.16 RCW; 3
(f) The furnishing of lodging and all other services by a hotel, 4
rooming house, tourist court, motel, trailer camp, and the granting 5
of any similar license to use real property, as distinguished from 6
the renting or leasing of real property, and it is presumed that the 7
occupancy of real property for a continuous period of one month or 8
more constitutes a rental or lease of real property and not a mere 9
license to use or enjoy the same. For the purposes of this 10
subsection, it is presumed that the sale of and charge made for the 11
furnishing of lodging for a continuous period of one month or more to 12
a person is a rental or lease of real property and not a mere license 13
to enjoy the same. For the purposes of this section, it is presumed 14
that the sale of and charge made for the furnishing of lodging 15
offered regularly for public occupancy for periods of less than a 16
month constitutes a license to use or enjoy the property subject to 17
sales and use tax and not a rental or lease of property;18
(g) The installing, repairing, altering, or improving of digital 19
goods for consumers; 20
(h) Persons taxable under (a), (b), (c), (d), (e), (f), and (g) 21
of this subsection when such sales or charges are for property, labor 22
and services which are used or consumed in whole or in part by such 23
persons in the performance of any activity defined as a "sale at 24
retail" or "retail sale" even though such property, labor and 25
services may be resold after such use or consumption. Nothing 26
contained in this subsection may be construed to modify subsection 27
(1) of this section and nothing contained in subsection (1) of this 28
section may be construed to modify this subsection.29
(3) The term "sale at retail" or "retail sale" includes the sale 30
of or charge made for personal, business, or professional services 31
including amounts designated as interest, rents, fees, admission, and 32
other service emoluments however designated, received by persons 33
engaging in the following business activities: 34
(a) Abstract, title insurance, and escrow services;35
(b) Credit bureau services; 36
(c) Automobile parking and storage garage services;37
(d) Landscape maintenance and horticultural services but 38
excluding (i) horticultural services provided to farmers and (ii) 39
pruning, trimming, repairing, removing, and clearing of trees and 40
p. 6 HB 2297
brush near electric transmission or distribution lines or equipment, 1
if performed by or at the direction of an electric utility;2
(e) Service charges associated with tickets to professional 3
sporting events; 4
(f) The following personal services: Tanning salon services, 5
tattoo parlor services, steam bath services, turkish bath services, 6
escort services, and dating services; 7
(g) Information technology training services, technical support, 8
and other services including, but not limited to, assisting with 9
network operations and support, help desk services, in-person 10
training related to hardware or software, network system support 11
services, data entry services, and data processing services;12
(h) Custom website development services. For the purposes of this 13
subsection (3), "website development services" means the design, 14
development, and support of a website provided by a website developer 15
to a customer; 16
(i) Investigation, security services, security monitoring 17
services, and armored car services including, but not limited to, 18
background checks, security guard and patrol services, personal and 19
event security, armored car transportation of cash and valuables, and 20
security system services and monitoring. This does not include 21
locksmith services. For purposes of this subsection (3)(i), the terms 22
"sale at retail" and "retail sale" do not include a sale made to a 23
grocery store, farmers market, or other food retailer;24
(j) Temporary staffing services. For the purposes of this 25
subsection (3), "temporary staffing services" means providing workers 26
to other businesses, except for hospitals licensed under chapter 27
70.41 or 71.12 RCW, for limited periods of time to supplement their 28
workforce and fill employment vacancies on a contract or for fee 29
basis; 30
(k) Advertising services. (i) For the purposes of this subsection 31
(3), "advertising services" means all digital and nondigital services 32
related to the creation, preparation, production, or dissemination of 33
advertisements including, but not limited to: 34
(A) Layout, art direction, graphic design, mechanical 35
preparation, production supervision, placement, referrals, 36
acquisition of advertising space, and rendering advice concerning the 37
best methods of advertising products or services; and38
(B) Online referrals, search engine marketing ((,)) and lead 39
generation optimization, web campaign planning, the acquisition of 40
p. 7 HB 2297
advertising space in the internet media, and the monitoring and 1
evaluation of website traffic for purposes of determining the 2
effectiveness of an advertising campaign. 3
(ii) "Advertising services" do not include: 4
(A) Web hosting services and domain name registration;5
(B) Services rendered in respect to the following:6
(I) "Newspapers" as defined in RCW 82.04.214; 7
(II) Printing or publishing under RCW 82.04.280; and8
(III) "Radio and television broadcasting" within this state as 9
defined in RCW 82.04.281; and 10
(C) Services rendered in respect to out-of-home advertising, 11
including: Billboard advertising; street furniture advertising; 12
transit advertising; place-based advertising, such as in-store 13
display advertising or point-of-sale advertising; dynamic or static 14
signage at live events; naming rights; and fixed signage advertising. 15
Out-of-home advertising does not include direct mail;16
(l) Live presentations including, but not limited to, lectures, 17
seminars, workshops, or courses where participants attend either in-18
person or via the internet or telecommunications equipment that 19
allows audience members and the presenter or instructor to give, 20
receive, and discuss information with each other in real time; and21
(m)(i) Operating an athletic or fitness facility, including all 22
charges for the use of such a facility or for any associated services 23
and amenities, except as provided in (m)(ii) of this subsection.24
(ii) Notwithstanding anything to the contrary in (m)(i) of this 25
subsection (3), the term "sale at retail" and "retail sale" under 26
this subsection does not include: 27
(A) Separately stated charges for the use of an athletic or 28
fitness facility where such use is primarily for a purpose other than 29
engaging in or receiving instruction in a physical fitness activity;30
(B) Separately stated charges for the use of a discrete portion 31
of an athletic or fitness facility, other than a pool, where such 32
discrete portion of the facility does not by itself meet the 33
definition of "athletic or fitness facility" in this subsection;34
(C) Separately stated charges for services, such as massage, 35
nutritional consulting, and body composition testing, that do not 36
require the customer to engage in physical fitness activities to 37
receive the service. The exclusion in this subsection (3)(m)(ii)(C) 38
does not apply to personal training services and instruction in a 39
physical fitness activity; 40
p. 8 HB 2297
(D) Separately stated charges for physical therapy provided by a 1
physical therapist, as those terms are defined in RCW 18.74.010, or 2
occupational therapy provided by an occupational therapy 3
practitioner, as those terms are defined in RCW 18.59.020, when 4
performed pursuant to a referral from an authorized health care 5
practitioner or in consultation with an authorized health care 6
practitioner. For the purposes of this subsection (3)(m)(ii)(D), an 7
authorized health care practitioner means a health care practitioner 8
licensed under chapter 18.83, 18.25, 18.36A, 18.57, 18.71, or 18.71A 9
RCW, or, until July 1, 2022, chapter 18.57A RCW; 10
(E) Rent or association fees charged by a landlord or residential 11
association to a tenant or residential owner with access to an 12
athletic or fitness facility maintained by the landlord or 13
residential association, unless the rent or fee varies depending on 14
whether the tenant or owner has access to the facility;15
(F) Services provided in the regular course of employment by an 16
employee with access to an athletic or fitness facility maintained by 17
the employer for use without charge by its employees or their family 18
members; 19
(G) The provision of access to an athletic or fitness facility by 20
an educational institution to its students and staff. However, 21
charges made by an educational institution to its alumni or other 22
members of the public for the use of any of the educational 23
institution's athletic or fitness facilities are a retail sale under 24
this subsection (3)(m). For purposes of this subsection 25
(3)(m)(ii)(G), "educational institution" has the same meaning as in 26
RCW 82.04.170; 27
(H) Yoga, chi gong, or martial arts classes, training, or events 28
held at a community center, park, school gymnasium, college or 29
university, hospital or other medical facility, private residence, or 30
any other facility that is not operated within and as part of an 31
athletic or fitness facility. 32
(iii) Nothing in (m)(ii) of this subsection (3) may be construed 33
to affect the taxation of sales made by the operator of an athletic 34
or fitness facility, where such sales are defined as a retail sale 35
under any provision of this section other than this subsection (3).36
(iv) For the purposes of this subsection (3)(m), the following 37
definitions apply: 38
(A) "Athletic or fitness facility" means an indoor or outdoor 39
facility or portion of a facility that is primarily used for: 40
p. 9 HB 2297
Exercise classes; strength and conditioning programs; personal 1
training services; tennis, racquetball, handball, squash, or 2
pickleball; or other activities requiring the use of exercise or 3
strength training equipment, such as treadmills, elliptical machines, 4
stair climbers, stationary cycles, rowing machines, pilates 5
equipment, balls, climbing ropes, jump ropes, and weightlifting 6
equipment. 7
(B) "Martial arts" means any of the various systems of training 8
for physical combat or self-defense. "Martial arts" includes, but is 9
not limited to, karate, kung fu, tae kwon do, Krav Maga, boxing, 10
kickboxing, jujitsu, shootfighting, wrestling, aikido, judo, hapkido, 11
Kendo, tai chi, and mixed martial arts. 12
(C) "Physical fitness activities" means activities that involve 13
physical exertion for the purpose of improving or maintaining the 14
general fitness, strength, flexibility, conditioning, or health of 15
the participant. "Physical fitness activities" includes participating 16
in yoga, chi gong, or martial arts. 17
For the purposes of (g) through (i) and (k) of this subsection 18
(3), the terms "sale at retail" and "retail sale" do not include a 19
sale between members of an affiliated group as defined in RCW 20
82.04.299(1)(f). 21
(4)(a) The term also includes the renting or leasing of tangible 22
personal property to consumers. 23
(b) The term does not include the renting or leasing of tangible 24
personal property where the lease or rental is for the purpose of 25
sublease or subrent. 26
(5) The term also includes the providing of "competitive 27
telephone service," "telecommunications service," or "ancillary 28
services," as those terms are defined in RCW 82.04.065, to consumers.29
(6)(a) The term also includes the sale of prewritten computer 30
software, custom software, and customization of prewritten computer 31
software to a consumer, regardless of the method of delivery to the 32
end user. For purposes of this subsection (6)(a), the sale of 33
prewritten computer software includes the sale of or charge made for 34
a key or an enabling or activation code, where the key or code is 35
required to activate prewritten computer software and put the 36
software into use. There is no separate sale of the key or code from 37
the prewritten computer software, regardless of how the sale may be 38
characterized by the vendor or by the purchaser. 39
p. 10 HB 2297
(b)(i) The term also includes the charge made to consumers for 1
the right to access and use prewritten computer software, custom 2
software, and customization of prewritten computer software, where 3
possession of the software is maintained by the seller or a third 4
party, regardless of whether the charge for the service is on a per 5
use, per user, per license, subscription, or some other basis.6
(ii)(A) The service described in (b)(i) of this subsection (6) 7
includes the right to access and use prewritten computer software, 8
custom software, and customization of prewritten computer software to 9
perform data processing. 10
(B) For purposes of this subsection (6)(b)(ii), "data processing" 11
means the systematic performance of operations on data to extract the 12
required information in an appropriate form or to convert the data to 13
usable information. Data processing includes check processing, image 14
processing, form processing, survey processing, payroll processing, 15
claim processing, and similar activities. 16
(7) The term also includes the sale of or charge made for an 17
extended warranty to a consumer. For purposes of this subsection, 18
"extended warranty" means an agreement for a specified duration to 19
perform the replacement or repair of tangible personal property at no 20
additional charge or a reduced charge for tangible personal property, 21
labor, or both, or to provide indemnification for the replacement or 22
repair of tangible personal property, based on the occurrence of 23
specified events. The term "extended warranty" does not include an 24
agreement, otherwise meeting the definition of extended warranty in 25
this subsection, if no separate charge is made for the agreement and 26
the value of the agreement is included in the sales price of the 27
tangible personal property covered by the agreement. For purposes of 28
this subsection, "sales price" has the same meaning as in RCW 29
82.08.010. 30
(8)(a) The term also includes the following sales to consumers of 31
digital goods, digital codes, and digital automated services:32
(i) Sales in which the seller has granted the purchaser the right 33
of permanent use; 34
(ii) Sales in which the seller has granted the purchaser a right 35
of use that is less than permanent; 36
(iii) Sales in which the purchaser is not obligated to make 37
continued payment as a condition of the sale; and 38
(iv) Sales in which the purchaser is obligated to make continued 39
payment as a condition of the sale. 40
p. 11 HB 2297
(b) A retail sale of digital goods, digital codes, or digital 1
automated services under this subsection (8) includes any services 2
provided by the seller exclusively in connection with the digital 3
goods, digital codes, or digital automated services, whether or not a 4
separate charge is made for such services. 5
(c) A retail sale of digital goods, digital codes, or digital 6
automated services does not include the following services if the 7
sale occurs between members of an affiliated group as defined in RCW 8
82.04.299(1)(f): 9
(i) Any service that primarily involves the application of human 10
effort by the seller, and the human effort originated after the 11
customer requested the service; 12
(ii) Live presentations, such as lectures, seminars, workshops, 13
or courses, where participants are connected to other participants 14
via the internet or telecommunications equipment, which allows 15
audience members and the presenter or instructor to give, receive, 16
and discuss information with each other in real time;17
(iii) Advertising services. For purposes of this subsection 18
(8)(c), "advertising services" means all services directly related to 19
the creation, preparation, production, or dissemination of 20
advertisements. Advertising services include layout, art direction, 21
graphic design, mechanical preparation, production supervision, 22
placement, and rendering advice to a client concerning the best 23
methods of advertising that client's products or services. 24
Advertising services also include online referrals, search engine 25
marketing and lead generation optimization, web campaign planning, 26
the acquisition of advertising space in the internet media, and the 27
monitoring and evaluation of website traffic for purposes of 28
determining the effectiveness of an advertising campaign. Advertising 29
services do not include web hosting services and domain name 30
registration; and 31
(iv) Data processing services. For purposes of this subsection 32
(8)(c), "data processing service" means a primarily automated service 33
provided to a business or other organization where the primary object 34
of the service is the systematic performance of operations by the 35
service provider on data supplied in whole or in part by the customer 36
to extract the required information in an appropriate form or to 37
convert the data to usable information. Data processing services 38
include check processing, image processing, form processing, survey 39
processing, payroll processing, claim processing, and similar 40
p. 12 HB 2297
activities. Data processing does not include the service described in 1
subsection (6)(b) of this section. 2
(d) For purposes of this subsection, "permanent" means perpetual 3
or for an indefinite or unspecified length of time. A right of 4
permanent use is presumed to have been granted unless the agreement 5
between the seller and the purchaser specifies or the circumstances 6
surrounding the transaction suggest or indicate that the right to use 7
terminates on the occurrence of a condition subsequent.8
(9) The term also includes the charge made for providing tangible 9
personal property along with an operator for a fixed or indeterminate 10
period of time. A consideration of this is that the operator is 11
necessary for the tangible personal property to perform as designed. 12
For the purpose of this subsection (9), an operator must do more than 13
maintain, inspect, or set up the tangible personal property.14
(10) The term does not include the sale of or charge made for 15
labor and services rendered in respect to the building, repairing, or 16
improving of any street, place, road, highway, easement, right-of-17
way, mass public transportation terminal or parking facility, bridge, 18
tunnel, or trestle which is owned by a municipal corporation or 19
political subdivision of the state or by the United States and which 20
is used or to be used primarily for foot or vehicular traffic 21
including mass transportation vehicles of any kind.22
(11) The term also does not include sales of chemical sprays or 23
washes to persons for the purpose of postharvest treatment of fruit 24
for the prevention of scald, fungus, mold, or decay, nor does it 25
include sales of feed, seed, seedlings, fertilizer, agents for 26
enhanced pollination including insects such as bees, and spray 27
materials to: (a) Persons who participate in the federal conservation 28
reserve program, the environmental quality incentives program, the 29
wetlands reserve program, and the wildlife habitat incentives 30
program, or their successors administered by the United States 31
department of agriculture; (b) farmers for the purpose of producing 32
for sale any agricultural product; (c) farmers for the purpose of 33
providing bee pollination services; and (d) farmers acting under 34
cooperative habitat development or access contracts with an 35
organization exempt from federal income tax under 26 U.S.C. Sec. 36
501(c)(3) of the federal internal revenue code or the Washington 37
state department of fish and wildlife to produce or improve wildlife 38
habitat on land that the farmer owns or leases. 39
p. 13 HB 2297
(12) The term does not include the sale of or charge made for 1
labor and services rendered in respect to the constructing, 2
repairing, decorating, or improving of new or existing buildings or 3
other structures under, upon, or above real property of or for the 4
United States, any instrumentality thereof, or a county or city 5
housing authority created pursuant to chapter 35.82 RCW, including 6
the installing, or attaching of any article of tangible personal 7
property therein or thereto, whether or not such personal property 8
becomes a part of the realty by virtue of installation. Nor does the 9
term include the sale of services or charges made for the clearing of 10
land and the moving of earth of or for the United States, any 11
instrumentality thereof, or a county or city housing authority. Nor 12
does the term include the sale of services or charges made for 13
cleaning up for the United States, or its instrumentalities, 14
radioactive waste and other by-products of weapons production and 15
nuclear research and development. 16
(13) The term does not include the sale of or charge made for 17
labor, services, or tangible personal property pursuant to agreements 18
providing maintenance services for bus, rail, or rail fixed guideway 19
equipment when a regional transit authority is the recipient of the 20
labor, services, or tangible personal property, and a transit agency, 21
as defined in RCW 81.104.015, performs the labor or services.22
(14) The term does not include the sale for resale of any service 23
described in this section if the sale would otherwise constitute a 24
"sale at retail" and "retail sale" under this section.25
(15)(a) The term "sale at retail" or "retail sale" includes 26
amounts charged, however labeled, to consumers to engage in any of 27
the activities listed in this subsection (15)(a), including the 28
furnishing of any associated equipment or, except as otherwise 29
provided in this subsection, providing instruction in such 30
activities, where such charges are not otherwise defined as a "sale 31
at retail" or "retail sale" in this section: 32
(i)(A) Golf, including any variant in which either golf balls or 33
golf clubs are used, such as miniature golf, hitting golf balls at a 34
driving range, and golf simulators, and including fees charged by a 35
golf course to a player for using his or her own cart. However, 36
charges for golf instruction are not a retail sale, provided that if 37
the instruction involves the use of a golfing facility that would 38
otherwise require the payment of a fee, such as green fees or driving 39
range fees, such fees, including the applicable retail sales tax, 40
p. 14 HB 2297
must be separately identified and charged by the golfing facility 1
operator to the instructor or the person receiving the instruction.2
(B) Notwithstanding (a)(i)(A) of this subsection (15) and except 3
as otherwise provided in this subsection (15)(a)(i)(B), the term 4
"sale at retail" or "retail sale" does not include amounts charged to 5
participate in, or conduct, a golf tournament or other competitive 6
event. However, amounts paid by event participants to the golf 7
facility operator are retail sales under this subsection (15)(a)(i). 8
Likewise, amounts paid by the event organizer to the golf facility 9
are retail sales under this subsection (15)(a)(i), if such amounts 10
vary based on the number of event participants; 11
(ii) Ballooning, hang gliding, indoor or outdoor sky diving, 12
paragliding, parasailing, and similar activities; 13
(iii) Air hockey, billiards, pool, foosball, darts, shuffleboard, 14
ping pong, and similar games; 15
(iv) Access to amusement park, theme park, and water park 16
facilities, including but not limited to charges for admission and 17
locker or cabana rentals. Discrete charges for rides or other 18
attractions or entertainment that are in addition to the charge for 19
admission are not a retail sale under this subsection (15)(a)(iv). 20
For the purposes of this subsection, an amusement park or theme park 21
is a location that provides permanently affixed amusement rides, 22
games, and other entertainment, but does not include parks or zoos 23
for which the primary purpose is the exhibition of wildlife, or 24
fairs, carnivals, and festivals as defined in (b)(i) of this 25
subsection; 26
(v) Batting cage activities; 27
(vi) Bowling, but not including competitive events, except that 28
amounts paid by the event participants to the bowling alley operator 29
are retail sales under this subsection (15)(a)(vi). Likewise, amounts 30
paid by the event organizer to the operator of the bowling alley are 31
retail sales under this subsection (15)(a)(vi), if such amounts vary 32
based on the number of event participants; 33
(vii) Climbing on artificial climbing structures, whether indoors 34
or outdoors; 35
(viii) Day trips for sightseeing purposes; 36
(ix) Bungee jumping, zip lining, and riding inside a ball, 37
whether inflatable or otherwise; 38
(x) Horseback riding offered to the public, where the seller 39
furnishes the horse to the buyer and providing instruction is not the 40
p. 15 HB 2297
primary focus of the activity, including guided rides, but not 1
including therapeutic horseback riding provided by an instructor 2
certified by a nonprofit organization that offers national or 3
international certification for therapeutic riding instructors;4
(xi) Fishing, including providing access to private fishing areas 5
and charter or guided fishing, except that fishing contests and 6
license fees imposed by a government entity are not a retail sale 7
under this subsection; 8
(xii) Guided hunting and hunting at game farms and shooting 9
preserves, except that hunting contests and license fees imposed by a 10
government entity are not a retail sale under this subsection;11
(xiii) Swimming, but only in respect to (A) recreational or 12
fitness swimming that is open to the public, such as open swim, lap 13
swimming, and special events like kids night out and pool parties 14
during open swim time, and (B) pool parties for private events, such 15
as birthdays, family gatherings, and employee outings. Fees for 16
swimming lessons, to participate in swim meets and other 17
competitions, or to join a swim team, club, or aquatic facility are 18
not retail sales under this subsection (15)(a)(xiii);19
(xiv) Go-karting, bumper cars, and other motorized activities 20
where the seller provides the vehicle and the premises where the 21
buyer will operate the vehicle; 22
(xv) Indoor or outdoor playground activities, such as inflatable 23
bounce structures and other inflatables; mazes; trampolines; slides; 24
ball pits; games of tag, including laser tag and soft-dart tag; and 25
human gyroscope rides, regardless of whether such activities occur at 26
the seller's place of business, but not including playground 27
activities provided for children by a licensed child day care center 28
or licensed family day care provider as those terms are defined in 29
RCW 43.216.010; 30
(xvi) Shooting sports and activities, such as target shooting, 31
skeet, trap, sporting clays, "5" stand, and archery, but only in 32
respect to discrete charges to members of the public to engage in 33
these activities, but not including fees to enter a competitive 34
event, instruction that is entirely or predominately classroom based, 35
or to join or renew a membership at a club, range, or other facility;36
(xvii) Paintball and airsoft activities; 37
(xviii) Skating, including ice skating, roller skating, and 38
inline skating, but only in respect to discrete charges to members of 39
the public to engage in skating activities, but not including skating 40
p. 16 HB 2297
lessons, competitive events, team activities, or fees to join or 1
renew a membership at a skating facility, club, or other 2
organization; 3
(xix) Nonmotorized snow sports and activities, such as downhill 4
and cross-country skiing, snowboarding, ski jumping, sledding, snow 5
tubing, snowshoeing, and similar snow sports and activities, whether 6
engaged in outdoors or in an indoor facility with or without snow, 7
but only in respect to discrete charges to the public for the use of 8
land or facilities to engage in nonmotorized snow sports and 9
activities, such as fees, however labeled, for the use of ski lifts 10
and tows and daily or season passes for access to trails or other 11
areas where nonmotorized snow sports and activities are conducted. 12
However, fees for the following are not retail sales under this 13
subsection (15)(a)(xix): (A) Instructional lessons; (B) permits 14
issued by a governmental entity to park a vehicle on or access public 15
lands; and (C) permits or leases granted by an owner of private 16
timberland for recreational access to areas used primarily for 17
growing and harvesting timber; and 18
(xx) Scuba diving; snorkeling; river rafting; surfing; 19
kiteboarding; flyboarding; water slides; inflatables, such as water 20
pillows, water trampolines, and water rollers; and similar water 21
sports and activities. 22
(b) Notwithstanding anything to the contrary in this subsection 23
(15), the term "sale at retail" or "retail sale" does not include 24
charges: 25
(i) Made for admission to, and rides or attractions at, fairs, 26
carnivals, and festivals. For the purposes of this subsection, fairs, 27
carnivals, and festivals are events that do not exceed 21 days and a 28
majority of the amusement rides, if any, are not affixed to real 29
property; 30
(ii) Made by an educational institution to its students and staff 31
for activities defined as retail sales by (a)(i) through (xx) of this 32
subsection. However, charges made by an educational institution to 33
its alumni or other members of the general public for these 34
activities are a retail sale under this subsection (15). For purposes 35
of this subsection (15)(b)(ii), "educational institution" has the 36
same meaning as in RCW 82.04.170; 37
(iii) Made by a vocational school for commercial diver training 38
that is licensed by the workforce training and education coordinating 39
board under chapter 28C.10 RCW; or 40
p. 17 HB 2297
(iv) Made for day camps offered by a nonprofit organization or 1
state or local governmental entity that provide youth not older than 2
age 18, or that are focused on providing individuals with 3
disabilities or mental illness, the opportunity to participate in a 4
variety of supervised activities. 5
(16)(a) The term "sale at retail" or "retail sale" includes the 6
purchase or acquisition of tangible personal property and specified 7
services by a person who receives either a qualifying grant exempt 8
from tax under RCW 82.04.767 or 82.16.320 or a grant deductible under 9
RCW 82.04.4339, except for transactions excluded from the definition 10
of "sale at retail" or "retail sale" by any other provision of this 11
section. Nothing in this subsection (16) may be construed to limit 12
the application of any other provision of this section to purchases 13
by a recipient of either a qualifying grant exempt from tax under RCW 14
82.04.767 or a grant deductible under RCW 82.04.4339, or by any other 15
person. 16
(b) For purposes of this subsection (16), "specified services" 17
means: 18
(i) The constructing, repairing, decorating, or improving of new 19
or existing buildings or other structures under, upon, or above real 20
property, including the installing or attaching of any article of 21
tangible personal property therein or thereto, whether or not such 22
personal property becomes a part of the realty by virtue of 23
installation; 24
(ii) The clearing of land or the moving of earth, whether or not 25
associated with activities described in (b)(i) of this subsection 26
(16); 27
(iii) The razing or moving of existing buildings or structures; 28
and 29
(iv) Landscape maintenance and horticultural services.30
PART III31
NEW SECTION. Sec. 301. INTENT. The purpose of this chapter is 32
to provide local communities options to preserve and increase access 33
to healthy and affordable food for Washingtonians living in 34
underserved communities. It is also the purpose of this chapter to 35
encourage grocery retailers to maintain their presence in underserved 36
communities and to incentivize the construction of new stores in 37
underserved areas based on community needs.38
p. 18 HB 2297
NEW SECTION. Sec. 302. DEFINITIONS. The definitions in this 1
section apply throughout this chapter unless the context clearly 2
requires otherwise.3
(1) "City" means any city or town. 4
(2) "Frontier county" means a county with a population density of 5
fewer than 50 persons per square mile. 6
(3) "Governing authority" means the local legislative authority 7
of a city or county having jurisdiction over the property for which 8
an exemption may be applied under this chapter. 9
(4) "Grocery store" means a small food retailer, a mid-sized food 10
retailer, or a supermarket. 11
(5) "Mid-sized food retailer" means a medium-sized retail outlet 12
with at least 2,500 but less than 16,000 square feet, of which at 13
least 75 percent is occupied by food and related products.14
(6) "Owner" means the property owner of record.15
(7) "Rural county" means a county with a population density of 16
fewer than 100 persons per square mile or a county smaller than 225 17
square miles, as determined by the office of financial management and 18
published each year by the department for the period July 1st to June 19
30th. 20
(8) "Small food retailer" means a retail outlet with less than 21
2,500 square feet that sells a limited selection of foods and other 22
products, such as a bodega, convenience store, corner store, 23
neighborhood store, small grocery, or small-scale store.24
(9) "Supermarket" means a retail outlet with at least 16,000 25
square feet, of which at least 90 percent is occupied by food and 26
related products. 27
(10) "Underserved community zone" means an area of land 28
designated by a governing authority in this chapter.29
(11) "Urban area" means a zip code with a population of more than 30
3,000 residents per square mile. 31
(12) "Urban county" means a county located in a metropolitan 32
statistical area as determined and defined by the United States 33
office of management and budget or other appropriate agency or office 34
of the federal government. 35
NEW SECTION. Sec. 303. UNDERSERVED COMMUNITY GROCERY STORE 36
PROPERTY TAX EXEMPTION PROGRAM. (1) A city governing authority may by 37
ordinance or resolution establish an underserved community grocery 38
store property tax exemption program to provide property tax 39
p. 19 HB 2297
exemptions to preserve existing grocery stores, to incentivize the 1
rehabilitation of existing or vacant grocery store buildings, and to 2
incentivize the construction of new grocery store buildings in 3
underserved communities. 4
(2) A county governing authority may by ordinance or resolution 5
establish an underserved community grocery store property tax 6
exemption program for unincorporated areas to provide property tax 7
exemptions to preserve existing grocery stores, to incentivize the 8
rehabilitation of existing or vacant grocery store buildings, and to 9
incentivize the construction of new grocery store buildings in 10
underserved communities. 11
(3) An underserved community grocery store property tax exemption 12
program established by a governing authority may offer one or more 13
property tax exemptions for the following categories of grocery 14
stores located within an underserved community zone designated by the 15
governing authority pursuant to section 305 of this act:16
(a) Existing grocery stores; 17
(b) Rehabilitated grocery stores; or 18
(c) Newly constructed grocery stores. 19
NEW SECTION. Sec. 304. AUTHORIZING RESOLUTION. (1) For the 20
purpose of creating an underserved community grocery store property 21
tax exemption program, the governing authority of a city or county 22
must adopt a resolution of intent to create an underserved community 23
grocery store property tax exemption program and designate one or 24
more areas as underserved community zones as generally described in 25
the resolution. The resolution must state the time and place of a 26
hearing to be held by the governing authority to consider the 27
creation of the program and the designation of the zones and may 28
include such other information pertaining to the creation of the 29
program and the designation of the zones as the governing authority 30
determines to be appropriate to apprise the public of the action 31
intended. However, the resolution must provide information pertaining 32
to:33
(a) The application process; 34
(b) The approval process; 35
(c) The appeals process for applications denied approval; and36
(d) Requirements, conditions, and obligations that must be 37
followed postapproval of an application. 38
p. 20 HB 2297
(2) The governing authority must give notice of a hearing held 1
under this chapter by publication of the notice once each week for 2
two consecutive weeks, not less than seven days, nor more than 30 3
days before the date of the hearing in a paper having a general 4
circulation in the city or county. The notice must state the time, 5
date, place, and purpose of the hearing and generally identify the 6
area or areas proposed to be designated as an underserved community 7
zone. 8
(3) Following the hearing or a continuance of the hearing, and 9
subject to the limit on underserved community zones in section 305 of 10
this act, the governing authority may create the program and 11
designate all or a portion of the area or areas described in the 12
resolution of intent as an underserved community zone or zones if it 13
finds, in its sole discretion, that the criteria in section 305 of 14
this act have been met. 15
NEW SECTION. Sec. 305. UNDERSERVED COMMUNITY ZONES. (1) Except 16
as otherwise provided in this section, the governing authority of a 17
city or county may designate an underserved community zone if it 18
determines that a contiguous group of census tracts within the city's 19
or county's jurisdiction meets the following requirements:20
(a) The area must meet one or more low-income criteria and the 21
low-access criterion; or 22
(b) The area must meet the criterion for health disadvantaged 23
areas and the low-access criterion; or 24
(c) The area must meet the criterion for a low-transportation-25
access area. 26
(2) For a property tax exemption for an existing grocery store, 27
as an alternative to meeting the requirements in subsection (1) of 28
this section, a governing authority must establish that without the 29
creation of an underserved community tax incentive program and the 30
designation of an underserved community zone, the area will meet the 31
requirements of subsection (1) of this section due to the closure of 32
an existing grocery store. 33
(3) A governing authority may use an alternative methodology for 34
the creation of an underserved community zone that fits its 35
community's needs if the methodology and accompanying data is 36
submitted to and it is approved by the department of commerce.37
(4) The total underserved community zone designations allowed per 38
county are as follows: 39
p. 21 HB 2297
(a) For urban counties, a maximum of 10 underserved community 1
zones; 2
(b) For rural counties, a maximum of five underserved community 3
zones; and 4
(c) For frontier counties, a maximum of three underserved 5
community zones. 6
(5) Five years after the establishment of an underserved 7
community zone and every five years thereafter, a governing authority 8
may add, remove, or alter the boundaries of an underserved community 9
zone. The governing authority must provide the department of commerce 10
with the methodology and reasoning for the change in the zone 11
location. 12
(6) The removal or altering of an underserved community zone does 13
not disqualify any existing property tax exemptions granted under 14
this chapter. 15
(7) The governing authority must provide information regarding 16
the location of the designated zones to the department of commerce.17
(8) Low-income criteria are as follows: 18
(a) Census tracts meeting one or more income criteria used in the 19
food access research atlas published by the United States department 20
of agriculture; or 21
(b) Census tracts in which 25 percent or more of the population 22
have incomes at or below 200 percent of poverty thresholds reflected 23
in the most recently available five-year American community survey 24
estimates. 25
(9) The definitions in this subsection apply throughout this 26
section unless the context clearly requires otherwise.27
(a) "Health disadvantaged areas" include census tracts with an 28
index score of eight or above on the most recently published 29
department of health environmental health disparities map index, 30
indicating the highest composite levels of health disadvantage based 31
on a combination of environmental, health, socioeconomic, and 32
demographic factors. 33
(b) "Low-access area" means a grouping of contiguous census 34
tracts in which at least 500 people or 33 percent of the population 35
is greater than 0.5 miles from the nearest supermarket or an urban 36
area or greater than 10 miles for a rural area. 37
(c) "Low-transportation-access area" means a grouping of census 38
tracts in which: 39
p. 22 HB 2297
(i) More than 100 households have no access to a vehicle, 1
according to the most recently published five-year American community 2
survey estimate and the grouping of census tracts is located more 3
than 0.5 miles from the nearest supermarket; or 4
(ii) At least 500 people or 33 percent of the population live 5
more than 20 miles from the nearest supermarket. 6
NEW SECTION. Sec. 306. QUALIFYING REAL PROPERTY. (1) The value 7
of real property qualifying under this chapter is exempt from local 8
and state property taxation under this title as provided in this 9
chapter.10
(2) For existing grocery stores, the value of the real property 11
consisting of a grocery store building or a portion of a building 12
used as a grocery store within an underserved community zone as 13
identified by a governing authority is exempt from taxation for 14
properties for which an application for a certificate of tax 15
exemption is submitted and approved under this chapter. The value is 16
exempt under this section for 30 successive years beginning on the 17
day the certificate is approved by the governing authority.18
(3) For rehabilitated grocery stores, the value of the new 19
construction and the value of the real property consisting of a 20
grocery store or a portion of a building used as a grocery store 21
within an underserved community zone as identified by a governing 22
authority is exempt from taxation for properties for which an 23
application for a certificate of tax exemption is submitted under 24
this chapter. The value is exempt under this section for 30 25
successive years beginning on the day the certificate is granted by 26
the governing authority. 27
(4) For newly constructed grocery stores, the value of the new 28
construction consisting of a grocery store or a portion of a building 29
used as a grocery store within an underserved community zone as 30
identified by a governing authority is exempt from taxation for 31
properties for which an application for a certificate of tax 32
exemption is submitted and approved under this chapter. The value is 33
exempt under this section for 30 successive years beginning on the 34
day the certificate is approved by the governing authority.35
(5) The exemptions provided in this section do not include the 36
value of real property not qualifying under this chapter and do not 37
apply to the value of the land. 38
p. 23 HB 2297
(6) The exemptions provided in this section do not apply to 1
increases in assessed valuation made by the assessor on nonqualifying 2
portions of building and value of land nor to increases made by 3
lawful order of a county board of equalization, the department, or a 4
county to a class of property throughout the county or specific area 5
of the county to achieve the uniformity of assessment or appraisal 6
required by law. 7
(7) The real property consisting of an existing grocery store, a 8
rehabilitated grocery store, or newly constructed grocery store must 9
be located in an underserved community zone as identified by the 10
governing authority under section 305 of this act on the date the tax 11
exemption certificate is granted to the owner by the governing 12
authority. 13
(8) Rehabilitated and new construction grocery stores must:14
(a) Meet all construction and development regulations of the city 15
or county; 16
(b) Be zoned as a commercial or mixed-use development; and17
(c) Be party to a contract with the city or county approved by 18
the governing authority under which the applicant has agreed to the 19
implementation of the development on terms and conditions 20
satisfactory to the governing authority. 21
(9) The exemptions provided in this section do not apply to 22
property taxes levied by school districts. 23
(10) The exemption provided in this section is in addition to any 24
other exemptions, deferrals, credits, grants, or other tax incentives 25
provided by law. 26
(11) At the conclusion of the exemption period, the cost of new 27
construction and rehabilitative improvements to the property must be 28
considered as new construction for the purposes of chapters 84.55 and 29
36.21 RCW. 30
NEW SECTION. Sec. 307. APPLICATIONS. An owner of a property 31
seeking an exemption under this chapter must complete the following 32
procedures:33
(1) The owner must apply to the city or county on forms adopted 34
by the governing authority. The application must contain the 35
following: 36
(a) Information setting forth the grounds supporting the 37
requested exemption including information indicated on the 38
application form or required by this chapter; 39
p. 24 HB 2297
(b) For rehabilitation projects and new construction, a 1
description of the site plan, a statement that the applicant would 2
not have built in this location but for the availability of the tax 3
exemption under this chapter, and other information requested; and4
(c) A statement that the applicant is aware of the potential tax 5
liability involved when the property ceases to be eligible for the 6
incentive provided under this chapter; 7
(2) The applicant must verify the application by oath or 8
affirmation; and 9
(3) The application must be accompanied by the application fee, 10
if any, required under this chapter. The governing authority may 11
permit the applicant to revise an application before final action by 12
the governing authority. 13
NEW SECTION. Sec. 308. APPROVAL OF APPLICATIONS. (1) The city 14
or county may approve the application if it finds that:15
(a) The existing grocery store, the rehabilitated grocery store, 16
or the newly constructed grocery store will provide fresh and 17
affordable groceries to an underserved community located in an 18
underserved community zone; 19
(b) For rehabilitated or newly constructed grocery stores, the 20
proposed project is, or will be, at the time of completion, in 21
conformance with all local plans and regulations that apply at the 22
time the application is approved; and 23
(c) The criteria of this chapter have been satisfied.24
(2) The city or county must approve or deny an application filed 25
under this chapter within 90 days after receipt of the application.26
(3) If the application is denied by the city or county, the city 27
or county must state in writing the reasons for denial and send the 28
notice to the applicant at the applicant's last known address within 29
10 days of the denial. 30
(4) Upon denial by the city or county, an applicant may appeal 31
the denial to the city's or county's governing authority within 30 32
days after receipt of the denial. The appeal before the city's or 33
county's governing authority must be based upon the record made 34
before the governing authority with the burden of proof on the 35
applicant to show that there was no substantial evidence to support 36
the decision. The decision of the city's or county's governing 37
authority in denying or approving the application is final.38
p. 25 HB 2297
(5)(a) If the application for a rehabilitated grocery store or a 1
newly constructed grocery store is approved, the city or county must 2
issue the owner of the property a conditional certificate of tax 3
exemption. The certificate must contain a statement by a duly 4
authorized administrative official of the governing authority that 5
the property has complied with the required criteria of this chapter.6
(b) The city or county must file the conditional certificate of 7
tax exemption with the county assessor within 10 days of approval.8
(6)(a) If the application for an existing grocery store is 9
approved, the city or county must issue the owner of the property a 10
certificate of tax exemption. The certificate must contain a 11
statement by a duly authorized administrative official of the 12
governing authority that the property has complied with the required 13
criteria of this chapter. 14
(b) The city or county must file the certificate of tax exemption 15
with the county assessor within 10 days of approval.16
NEW SECTION. Sec. 309. COMPLETION OF PROJECTS. (1) Upon 17
completion of a rehabilitation project or new construction of a 18
grocery store building for which an application for an exemption 19
under this chapter has been approved and issued a certificate of 20
occupancy, the owner must file with the city or county the following:21
(a) A description of the work that has been completed and a 22
statement that the new construction on the owner's property qualifies 23
the property for a partial or total exemption under this chapter; and24
(b) A statement regarding the fresh food and new jobs offered as 25
a result of the new construction of the grocery store.26
(2) Within 30 days after receipt of the statements required under 27
subsection (1) of this section, the city or county must determine 28
whether the work completed is consistent with the application 29
approved by the city or county and whether the property qualifies for 30
a tax exemption under this chapter. 31
(3) If the criteria of this chapter have been satisfied and the 32
owner's property is qualified for a tax exemption under this chapter, 33
the city or county must file the certificate of tax exemption with 34
the county assessor within 40 days after receipt of the statements 35
required under subsection (1) of this section. 36
(4) The city or county must notify the applicant that a 37
certificate of tax exemption is denied if the city or county 38
determines that: 39
p. 26 HB 2297
(a) The work was not constructed consistent with the application 1
or other applicable requirements; or 2
(b) The owner's property is otherwise not qualified for an 3
exemption under this chapter. 4
(5) The city's or county's governing authority may enact an 5
ordinance to provide a process for an owner to appeal a decision by 6
the city or county that the owner is not entitled to a certificate of 7
tax exemption to the city or county. The owner may appeal a decision 8
by the city or county to deny a certificate of tax exemption in 9
superior court under RCW 34.05.510 through 34.05.598 if the appeal is 10
filed within 30 days of notification by the city or county to the 11
owner of the exemption denial. 12
NEW SECTION. Sec. 310. APPLICATION FEE. The governing authority 13
may establish an application fee for the tax exemption under this 14
chapter. This fee may not exceed an amount determined to be required 15
to cover the cost to be incurred by the governing authority and the 16
assessor in administering this chapter. The application fee must be 17
paid at the time the application is filed. If the application is 18
approved, the governing authority of the city or county must pay the 19
application fee to the county assessor for deposit in the county 20
current expense fund, after first deducting that portion of the fee 21
attributable to its own administrative costs in processing the 22
application. If the application is denied, the city's or county's 23
governing authority may retain that portion of the application fee 24
attributable to its own administrative costs and refund the balance 25
to the applicant.26
NEW SECTION. Sec. 311. REPORT. (1) Thirty days after the 27
anniversary of the date of the certificate of tax exemption and each 28
year for the tax exemption period, the owner of the exempted property 29
must file with a designated authorized representative of the city or 30
county an annual report indicating the following:31
(a) A certification by the owner that the property has not 32
changed use that is, if the owner of the property and the retailer 33
are not the same individual, verified by the grocery store retailer;34
(b) A description of changes or improvements constructed after 35
issuance of the certificate of tax exemption; and 36
(c) Any additional information requested by the city or county.37
p. 27 HB 2297
(2) A city or county that issues a certificate of tax exemption 1
under this chapter must report annually by December 31st of each 2
year, beginning in 2026, to the department of commerce. The report 3
must include the following information: 4
(a) The number of tax exemption certificates granted;5
(b) The total number and type of existing buildings exempted, and 6
the total number and type of rehabilitated and new grocery stores 7
constructed; 8
(c) The value of the tax exemption for each project receiving a 9
tax exemption and the total value of tax exemptions granted;10
(d) The methodology and data used by the governing authority when 11
designating underserved community zones; and 12
(e) An explanation of how the program is working to supply fresh 13
and healthy food and new job opportunities to underserved 14
communities. 15
(3) A city or county that issues a certificate of tax exemption 16
under this chapter must annually provide a report to the department 17
of revenue that provides the information required in subsection (2) 18
of this section and any other information that the department of 19
revenue requires to verify eligibility for the business and 20
occupation tax incentives created in sections 401 and 501 of this 21
act. 22
NEW SECTION. Sec. 312. CONDITIONS FOR TRANSFER. (1) If the 23
value of the real property or real property improvements have been 24
exempted under this chapter, the real property and real property 25
improvements continue to be exempted for the applicable period under 26
this chapter so long as they are not converted to another use and 27
continue to satisfy all applicable conditions including, but not 28
limited to, zoning, land use, and building requirements.29
(2) Transfer of property ownership does not terminate the 30
exemption. The exemption is subject to the successor meeting the 31
eligibility requirements under this chapter. The transferor of an 32
exempted property must notify the governing authority of the 33
transfer. The governing authority must certify that the successor 34
meets the requirements of the exemption. The transferor must provide 35
the information necessary for the county assessor to transfer the 36
exemption. If the transferor fails to notify the city or county 37
within 60 days, the tax exemption is terminated and all exempted 38
property taxes from the date of the transfer are immediately due and 39
p. 28 HB 2297
payable by the transferor as required in subsection (4) of this 1
section. 2
(3) If an owner voluntarily opts to discontinue compliance with 3
the requirements of this chapter, the owner must notify the county 4
assessor within 60 days of the change in use or intended 5
discontinuance and all exempted property taxes from the date of the 6
transfer are immediately due and payable by the transferor as 7
required in subsection (4) of this section. 8
(4) If, after a certificate of tax exemption has been filed with 9
the county assessor, the city or county discovers that a portion of 10
the property has changed or will be changed to disqualify the 11
property for exemption eligibility under this chapter, the tax 12
exemption must be canceled, and the following occurs:13
(a) Additional real property tax must be imposed on the value of 14
the nonqualifying improvements in the amount that would be imposed if 15
an exemption had not been available under this chapter, plus a 16
penalty equal to 20 percent of the additional value. This additional 17
tax is calculated based upon the difference between the property tax 18
paid and the property tax that would have been paid if it had 19
included the value of the nonqualifying improvements dated back to 20
the date that the improvements were converted to a nonqualifying use;21
(b) Interest upon the amounts of the additional tax at the same 22
statutory rate charged on delinquent property taxes must be included 23
from the dates on which the additional tax could have been paid 24
without penalty if the improvements had been assessed at a value 25
without regard to this chapter; and 26
(c) The additional tax owed together with interest and penalty 27
becomes a lien on the property and attaches at the time the property 28
or portion of the property is removed from the qualifying use under 29
this chapter, or the amenities no longer meet the applicable 30
requirements for exemption under this chapter. A lien under this 31
section has priority to, and must be fully paid and satisfied before, 32
a recognizance, mortgage, judgment, debt, obligation, or 33
responsibility to or with which the property may become charged or 34
liable. The lien may be foreclosed upon expiration of the same period 35
after delinquency and in the same manner provided by law for 36
foreclosure of liens for delinquent real property taxes. An 37
additional tax unpaid on its due date is delinquent. From the date of 38
delinquency until paid, interest must be charged at the same rate 39
applied by law to delinquent property taxes. 40
p. 29 HB 2297
(5) Upon a determination that a tax exemption is to be terminated 1
for a reason stated in this section, the city's or county's governing 2
authority must notify the record owner of the property as shown by 3
the tax rolls by mail, return receipt requested, of the determination 4
to terminate the exemption. The owner may appeal the determination to 5
the city or county, within 30 days by filing a notice of appeal with 6
the city or county, which notice must specify the factual and legal 7
basis on which the determination of termination is alleged to be 8
erroneous. At an appeal hearing, all affected parties may be heard 9
and all competent evidence received. After the hearing, the deciding 10
body or officer must either affirm, modify, or repeal the decision of 11
termination of exemption based on the evidence received. An aggrieved 12
party may appeal the decision of the deciding body or officer to the 13
superior court as provided in RCW 34.05.510 through 34.05.598.14
(6) Upon determination by the city or county to terminate an 15
exemption, the county officials having possession of the assessment 16
and tax rolls must correct the rolls in the manner provided for 17
omitted property under RCW 84.40.080. The county assessor must make 18
such a valuation of the property and improvements as is necessary to 19
permit the correction of the rolls. The value of the new construction 20
from the rehabilitated grocery store or the newly constructed grocery 21
store added to the rolls is considered new construction for the 22
purposes of chapter 84.40 RCW. The owner may appeal the valuation to 23
the county board of equalization as provided in chapter 84.40 RCW. If 24
there has been a failure to comply with this chapter, the property 25
must be listed as an omitted assessment for assessment years 26
beginning January 1st of the calendar year in which the noncompliance 27
first occurred, but the listing as an omitted assessment may not be 28
for a period more than three calendar years preceding the year in 29
which the failure to comply was discovered. 30
NEW SECTION. Sec. 313. This chapter expires January 1, 2037.31
PART IV32
NEW SECTION. Sec. 401. A new section is added to chapter 82.04 33
RCW to read as follows: 34
(1) Beginning January 1, 2027, a person is allowed a credit 35
against the tax imposed in this chapter equal to 0.029 percent 36
p. 30 HB 2297
multiplied by the gross income of the grocery store operating in an 1
underserved community zone. 2
(2) To qualify for this credit, a person must be located in an 3
underserved community zone established in section 305 of this act.4
(3) Cities and counties with established underserved community 5
grocery store property tax exemption programs must annually provide a 6
report to the department that includes the established underserved 7
community zone boundaries within their jurisdiction and any other 8
information required by the department to verify taxpayer eligibility 9
under this section. 10
(4) The credit claimed may not exceed the tax that would 11
otherwise be due under this chapter. Refunds may not be granted in 12
the place of credits. Any amount of credit earned under this section 13
not claimed by the person in one calendar year may be carried forward 14
for no more than one calendar year immediately following the year 15
that the credit was earned. 16
(5) The total amount of credit authorized under this section may 17
not exceed an annual statewide limit of $5,000,000 per calendar year.18
(6) No application is necessary for the tax credit. The person 19
must keep records necessary for the department to verify eligibility 20
under this section. To claim a credit a person must electronically 21
file with the department all returns, forms, and other information 22
the department requires in an electronic format as provided and 23
approved by the department. Any return, form, or information required 24
to be filed in electronic format under this section is not filed 25
until received by the department in an electronic format. For 26
purposes of this subsection, "returns" has the same meaning as 27
"return" in RCW 82.32.050. 28
(7) The definitions in this subsection apply throughout this 29
section unless the context clearly requires otherwise.30
(a) "Grocery store" has the same meaning as in section 302 of 31
this act. 32
(b) "Underserved community zone" means an underserved community 33
zone established in section 305 of this act. 34
(8) This section expires January 1, 2037. 35
PART V36
NEW SECTION. Sec. 501. A new section is added to chapter 82.04 37
RCW to read as follows: 38
p. 31 HB 2297
(1) This chapter does not apply to any person engaging within 1
this state in the business as a locally owned, employee-owned, union 2
run, or cultural grocery store that operates in an underserved 3
community zone established in section 305 of this act.4
(2) Cities and counties with established underserved community 5
grocery store property tax exemption programs must annually provide a 6
report to the department of revenue that includes the established 7
underserved community zone boundaries and any other information 8
required by the department of revenue to verify taxpayer eligibility 9
under this section. 10
(3) For purposes of this section, the following definitions 11
apply: 12
(a) "Cultural grocery store" means a grocery store whose sales of 13
culturally relevant food or items make up a minimum of 40 percent of 14
the store's total annual sales. 15
(b) "Employee-owned grocery store" means a grocery store in which 16
a significant portion of the ownership is held by employees.17
(c) "Grocery store" has the same meaning as in section 302 of 18
this act. 19
(d) "Underserved community zone" means an underserved community 20
zone established in section 305 of this act. 21
(e) "Union run grocery store" means a grocery store in which a 22
labor union serves as the primary operator or controlling entity and 23
exercises direct authority over management, governance, and business 24
operations. 25
(4) This section expires January 1, 2037. 26
PART VI27
NEW SECTION. Sec. 601. (1) This section is the tax preference 28
performance statement for the tax preferences contained in sections 29
301 through 312, 401, and 501, chapter . . ., Laws of 2026 (sections 30
301 through 312, 401, and 501 of this act). This performance 31
statement is only intended to be used for subsequent evaluation of 32
the tax preferences. It is not intended to create a private right of 33
action by any party or to be used to determine eligibility for 34
preferential tax treatment.35
(2) The legislature categorizes these tax preferences as ones 36
intended to provide tax relief for certain businesses or individuals, 37
as indicated in RCW 82.32.808(2)(e). 38
p. 32 HB 2297
(3) It is the legislature's specific public policy objective to 1
provide reduced tax liability for businesses that operate grocery 2
stores in underserved communities. 3
(4) If a review finds that after the effective date of these tax 4
preferences the following parameters are met, then the legislature 5
intends to extend the expiration date of these tax preferences:6
(a) The number of grocery stores operating in underserved 7
community zones has increased; 8
(b) The number of jobs created in grocery stores located in or 9
constructed in underserved community zones has increased;10
(c) The amount of fresh food offered in grocery stores located in 11
underserved community zones has increased; and 12
(d) Any number of grocery stores operating in underserved 13
community zones have avoided closure since the effective date of this 14
section. 15
(5) In order to obtain the data necessary to perform the review 16
in subsection (4) of this section, the joint legislative audit and 17
review committee may refer to any data collected by the state.18
PART VII19
NEW SECTION. Sec. 701. RCW 82.32.805 and 82.32.808 do not apply 20
to section 201 of this act.21
NEW SECTION. Sec. 702. Sections 301 through 312 of this act 22
apply to taxes levied for collection in 2027 and thereafter.23
NEW SECTION. Sec. 703. Sections 301 through 313 of this act 24
constitute a new chapter in Title 84 RCW.25
NEW SECTION. Sec. 704. This act takes effect July 1, 2026.26
--- END ---
p. 33 HB 2297