AWB’s High Level Evaluation of the New Striking Amendment
High-Level Summary of the Changes:
Makes changes to the intent section.
Removes "disregarded entities" from the definition of a "passthrough entity."
Directs the revenues from the tax to the State General Fund with five percent being transferred to the Fair Start for Kids Account.
Provides a deduction from Washington base income for 90 percent of Washington allocated gambling losses incurred in the current taxable year; however, the gambling loss deduction cannot exceed the amount of gambling income included in the Washington base income.
Provides a deduction for expenditures related to licensed commercial cannabis activities.
Clarifies that income related to sales and exchanges of long term capital assets exempt from Washington capital gains tax are also exempt from income tax under this act.
Provides a carryforward deduction for 80 percent of net operating losses from previous tax years.
Provides an exclusion for income earned by a nonresident participating as a keynote speaker, panelist, or moderator at a convention or trade show so long as the nonresident meets the requirements of RCW 82.32.531.
Provides a safe-harbor of five days for nonresidents receiving wages and other compensation for services performed in Washington.
Updates the inflation calculation for the standard deduction to Consumer Price Index for Urban Wage Earners and Clerical Workers.
Clarifies that the charitable deduction is for donations made to nonprofits principally directed and managed within Washington.
Adds provisions to comply with federal child support enforcement requirements.
Removes the revenue distribution to the Local Government Public Defense Funding Stabilization Account (Account) and eliminates the account.
Creates an advisory group to assist the Department of Revenue in the implementation of the act.
Adds first-class city pension proceeds to types of pension income subject to this act.
Adds a retail sales and use tax exemption for diapers and over-the-counter drugs beginning January 1, 2029.
Removes the early expiration of the business and occupation surcharge on high-grossing businesses.
Adds exemptions for hospitals and for warehousing and reselling of prescription drugs beginning January 1, 2029.
Changes the repeal date of the changes to certain retail sales on services, excluding advertising services, enacted in chapter 422, Laws of 2025 (Engrossed Substitute Senate Bill No. 5814) from January 1, 2030, to January 1, 2029.
Revises changes made in 2024 to certain sales and use taxes and business and occupation taxes. These changes are subject to a severability clause. The changes include:
Changes the sales tax on services on "live presentations" to exclude: Before and after school care provided in-person and on-site by elementary schools; presentations given by nonprofits; musical, dramatic, comedic, or similar performances; and one-on-one instructional activities.
Creates a retail sales and use tax exemption for all new service taxes created in chapter 422, Laws of 2025 (ESSB 5814) for K-12 schools, school districts, and educational service districts.
Exempts any Washington taxable income attributable to wholesale sales of food and food ingredients sold by wholesalers to retailers not under common ownership from the business and occupation tax 0.5 percent surcharge implemented in chapter 420, Laws of 2025 (ESHB 2081).
Increases the income threshold for the Working Families' Tax Credit to the needs standard.