title: RCW 82.80.070

text:
(1) The proceeds collected pursuant to the exercise of the local option authority of RCW 82.80.010 and 82.80.030 (hereafter called "local option transportation revenues") shall be used for transportation purposes only, including but not limited to the following: The operation and preservation of roads, streets, and other transportation improvements; new construction, reconstruction, and expansion of city streets, county roads, and state highways and other transportation improvements; development and implementation of public transportation and high capacity transit improvements and programs; and planning, design, and acquisition of right-of-way and sites for such transportation purposes. The proceeds collected from excise taxes on the sale, distribution, or use of motor vehicle fuel and special fuel under RCW 82.80.010 shall be used exclusively for "highway purposes" as that term is construed in Article II, section 40 of the state Constitution.
(2) The local option transportation revenues shall be expended for transportation uses consistent with the adopted transportation and land use plans of the jurisdiction expending the funds and consistent with any applicable and adopted regional transportation plan for metropolitan planning areas.
(3) Each local government with a population greater than eight thousand that levies or expends local option transportation funds, is also required to develop and adopt a specific transportation program that contains the following elements:
(a) The program shall identify the geographic boundaries of the entire area or areas within which local option transportation revenues will be levied and expended.
(b) The program shall be based on an adopted transportation plan for the geographic areas covered and shall identify the proposed operation and construction of transportation improvements and services in the designated plan area intended to be funded in whole or in part by local option transportation revenues and shall identify the annual costs applicable to the program.
(c) The program shall indicate how the local transportation plan is coordinated with applicable transportation plans for the region and for adjacent jurisdictions.
(d) The program shall include at least a six-year funding plan, updated annually, identifying the specific public and private sources and amounts of revenue necessary to fund the program. The program shall include a proposed schedule for construction of projects and expenditure of revenues. The funding plan shall consider the additional local tax revenue estimated to be generated by new development within the plan area if all or a portion of the additional revenue is proposed to be earmarked as future appropriations for transportation improvements in the program.
(4) Local governments with a population greater than eight thousand exercising the authority for local option transportation funds shall periodically review and update their transportation program to ensure that it is consistent with applicable local and regional transportation and land use plans and within the means of estimated public and private revenue available.
(5) In the case of expenditure for new or expanded transportation facilities, improvements, and services, priorities in the use of local option transportation revenues shall be identified in the transportation program and expenditures shall be made based upon the following criteria, which are stated in descending order of weight to be attributed:
(a) First, the project serves a multijurisdictional function;
(b) Second, it is necessitated by existing or reasonably foreseeable congestion;
(c) Third, it has the greatest person-carrying capacity;
(d) Fourth, it is partially funded by other government funds, such as from the state transportation improvement board, or by private sector contributions, such as those from the local transportation act, chapter 39.92 RCW; and
(e) Fifth, it meets such other criteria as the local government determines is appropriate.
(6) It is the intent of the legislature that as a condition of levying, receiving, and expending local option transportation revenues, no local government agency use the revenues to replace, divert, or loan any revenues currently being used for transportation purposes to nontransportation purposes.
(7) Local governments are encouraged to enter into interlocal agreements to jointly develop and adopt with other local governments the transportation programs required by this section for the purpose of accomplishing regional transportation planning and development.
(8) Local governments may use all or a part of the local option transportation revenues for the amortization of local government general obligation and revenue bonds issued for transportation purposes consistent with the requirements of this section.
(9) Subsections (1) through (8) of this section do not apply to a regional transportation investment district imposing a tax or fee under the local option authority of this chapter. Proceeds collected under the exercise of local option authority under this chapter by a district must be used in accordance with chapter 36.120 RCW.
[ 2017 3rd sp.s. c 25 s 43; 2005 c 319 s 139; 2002 c 56 s 413; 1991 c 141 s 4. Prior: 1990 c 42 s 212.]
Notes:
Findings—Intent—Part headings—Effective dates—2005 c 319: See notes following RCW 43.17.020.

catchline: Use of revenues.


doc_type: statute

jurisdiction: wa

title: RCW 82.80.080

text:
(1) The state treasurer shall distribute revenues, less authorized deductions, generated by the local option taxes authorized in RCW 82.80.010 and * 82.80.020, levied by counties to the levying counties, and cities contained in those counties, based on the relative per capita population. County population for purposes of this section is equal to one and one-half of the unincorporated population of the county. In calculating the distributions, the state treasurer shall use the population estimates prepared by the state office of financial management and shall further calculate the distribution based on information supplied by the departments of licensing and revenue, as appropriate.
(2) The state treasurer shall distribute revenues, less authorized deductions, generated by the local option taxes authorized in RCW 82.80.010 and * 82.80.020 levied by qualifying cities and towns to the levying cities and towns.
(3) The state treasurer shall distribute to the district revenues, less authorized deductions, generated by the local option taxes under RCW 82.80.010 or fees under RCW 82.80.100 levied by a district.
[ 2002 c 56 s 414; 1998 c 281 s 2; 1990 c 42 s 213.]
Notes:
*Reviser's note: RCW 82.80.020 was repealed by 2003 c 1 s 5 (Initiative Measure No. 776, approved November 5, 2002).

license: public-domain-government-work

rule_set: Revised Code of Washington

catchline: Distribution of taxes.

code: rcw

unit: section

court: Washington State Legislature


title: RCW 82.80.090

text:
A referendum petition to repeal a county or city ordinance imposing a tax or fee authorized under RCW 82.80.030 must be filed with a filing officer, as identified in the ordinance, within seven days of passage of the ordinance. Within ten days, the filing officer shall confer with the petitioner concerning form and style of the petition, issue an identification number for the petition, and write a ballot title for the measure. The ballot title shall be posed as a question so that an affirmative answer to the question and an affirmative vote on the measure results in the tax or fee being imposed and a negative answer to the question and a negative vote on the measure results in the tax or fee not being imposed. The petitioner shall be notified of the identification number and ballot title within this ten-day period.
After this notification, the petitioner has thirty days in which to secure on petition forms the signatures of not less than fifteen percent of the registered voters of the county for county measures, or not less than fifteen percent of the registered voters of the city for city measures, and to file the signed petitions with the filing officer. Each petition form must contain the ballot title and the full text of the measure to be referred. The filing officer shall verify the sufficiency of the signatures on the petitions. If sufficient valid signatures are properly submitted, the filing officer shall submit the referendum measure to the county or city voters at a general or special election held on one of the dates provided in RCW 29A.04.321 as determined by the county or city legislative authority, which election shall not take place later than one hundred twenty days after the signed petition has been filed with the filing officer.
The referendum procedure provided in this section is the exclusive method for subjecting any county or city ordinance imposing a tax or fee under RCW 82.80.030 to a referendum vote.
[ 2015 c 53 s 99; 1990 c 42 s 214.]

catchline: Referendum.


title: RCW 82.80.100

text:
(1) Upon approval of a majority of the voters within its boundaries voting on the ballot proposition, a regional transportation investment district may set and impose an annual local option vehicle license fee, or a schedule of fees based upon the age of the vehicle, of up to one hundred dollars per motor vehicle registered within the boundaries of the region on every motor vehicle. As used in this section "motor vehicle" has the meaning provided in RCW 46.04.320, but does not include farm tractors or farm vehicles as defined in RCW 46.04.180 and 46.04.181, off-road vehicles as defined in RCW 46.04.365, nonhighway vehicles as defined in RCW 46.09.310, and snowmobiles as defined in RCW 46.04.546. Vehicles registered under chapter 46.87 RCW and the international registration plan are exempt from the annual local option vehicle license fee set forth in this section. The department of licensing shall administer and collect this fee on behalf of regional transportation investment districts and remit this fee to the custody of the state treasurer for monthly distribution under RCW 82.80.080.
(2) The local option vehicle license fee applies only when renewing a vehicle registration, and is effective upon the registration renewal date as provided by the department of licensing.
(3) A regional transportation investment district imposing the local option vehicle license fee or initiating an exemption process shall enter into a contract with the department of licensing. The contract must contain provisions that fully recover the costs to the department of licensing for collection and administration of the fee.
(4) A regional transportation investment district imposing the local option fee shall delay the effective date of the local option vehicle license fee imposed by this section at least six months from the date of the final certification of the approval election to allow the department of licensing to implement the administration and collection of or exemption from the fee.
[ 2011 c 171 s 125; 2002 c 56 s 408.]
Notes:
Intent—Effective date—2011 c 171: See notes following RCW 4.24.210.

catchline: Regional transportation investment district—Local option vehicle license fee.


title: RCW 82.80.110

text:
(1) The definitions in this subsection apply throughout this section unless the context clearly requires otherwise.
(a) "Distributor" means every person who imports, refines, manufactures, produces, or compounds motor vehicle fuel and special fuel as defined in RCW 82.38.020 and sells or distributes the fuel into a county.
(b) "Person" has the same meaning as in RCW 82.04.030.
(2) For purposes of dedication to a regional transportation investment district plan under chapter 36.120 RCW, subject to the conditions of this section, a county may levy additional excise taxes equal to ten percent of the statewide fuel tax rates under RCW 82.38.030 on motor vehicle fuel and special fuel as defined in RCW 82.38.020 sold within the boundaries of the county. The additional excise tax is subject to the approval of the county's legislative body and a majority of the registered voters of the county voting on the proposition at a general or special election. An election held under this section must be held not more than twelve months before the date on which the proposed tax is to be levied. The ballot setting forth the proposition must state that the revenues from the tax will be used for a regional transportation investment district plan. The county's authority to levy additional excise taxes under this section includes the incorporated and unincorporated areas of the county. Vehicles paying an annual license fee under RCW 82.38.075 are exempt from the county fuel excise tax. The additional excise taxes are subject to the same exceptions and rights of refund as applicable to other motor vehicle fuel and special fuel excise taxes levied under chapter 82.38 RCW. The proposed tax may not be levied less than one month from the date the election results are certified by the county election officer. The commencement date for the levy of any tax under this section will be the first day of January, April, July, or October.
(3) The local option motor vehicle fuel tax on motor vehicle fuel and on special fuel is imposed upon the distributor of the fuel.
(4) A taxable event for the purposes of this section occurs upon the first distribution of the fuel within the boundaries of a county to a retail outlet, bulk fuel user, or ultimate user of the fuel.
(5) All administrative provisions in chapters 82.01, 82.03, and 82.32 RCW, insofar as they are applicable, apply to local option fuel taxes imposed under this section.
(6) Before the effective date of the imposition of the fuel taxes under this section, a county must contract with the department of revenue for the administration and collection of the taxes. The contract must provide that a percentage amount, not to exceed one percent of the taxes imposed under this section, will be deposited into the local tax administration account created in the custody of the state treasurer. The department of revenue may spend money from this account, upon appropriation, for the administration of the local taxes imposed under this section.
(7) The state treasurer must distribute monthly to the county levying the tax as part of a regional transportation investment plan, after the deductions for payments and expenditures as provided in RCW 46.68.090(1) (a) and (b).
(8) The proceeds of the additional taxes levied by a county in this section, to be used as a part of a regional transportation investment plan, must be used in accordance with chapter 36.120 RCW, but only for those areas that are considered "highway purposes" as that term is construed in Article II, section 40 of the state Constitution.
(9) A county may not levy the tax under this section if they are a member of a regional transportation investment district that is levying the tax in RCW 82.80.120 or the county is levying the tax in RCW 82.80.010.
[ 2014 c 216 s 204; 2013 c 225 s 642; 2003 c 350 s 2.]
Notes:
Effective date—Findings—Tax preference performance statement—2014 c 216: See notes following RCW 82.38.030.
Effective date—2013 c 225: See note following RCW 82.38.010.

catchline: Motor vehicle and special fuel tax—Dedication by county to regional transportation investment district plan.


title: RCW 82.80.120

text:
(1) The definitions in this subsection apply throughout this section unless the context clearly requires otherwise.
(a) "Distributor" means every person who imports, refines, manufactures, produces, or compounds motor vehicle fuel and special fuel as defined in RCW 82.38.020 and sells or distributes the fuel into a county.
(b) "Person" has the same meaning as in RCW 82.04.030.
(c) "District" means a regional transportation investment district under chapter 36.120 RCW.
(2) A regional transportation investment district under chapter 36.120 RCW, subject to the conditions of this section, may levy additional excise taxes equal to ten percent of the statewide fuel tax rates under RCW 82.38.030 on motor vehicle fuel and special fuel as defined in RCW 82.38.020 sold within the boundaries of the district. The additional excise tax is subject to the approval of a majority of the voters within the district boundaries. Vehicles paying an annual license fee under RCW 82.38.075 are exempt from the district's fuel excise tax. The additional excise taxes are subject to the same exceptions and rights of refund as applicable to other motor vehicle fuel and special fuel excise taxes levied under chapter 82.38 RCW. The proposed tax may not be levied less than one month from the date the election results are certified. The commencement date for the levy of any tax under this section will be the first day of January, April, July, or October.
(3) The local option motor vehicle fuel tax on motor vehicle fuel and on special fuel is imposed upon the distributor of the fuel.
(4) A taxable event for the purposes of this section occurs upon the first distribution of the fuel within the boundaries of the district to a retail outlet, bulk fuel user, or ultimate user of the fuel.
(5) All administrative provisions in chapters 82.01, 82.03, and 82.32 RCW, insofar as they are applicable, apply to local option fuel taxes imposed under this section.
(6) Before the effective date of the imposition of the fuel taxes under this section, a district must contract with the department of revenue for the administration and collection of the taxes. The contract must provide that a percentage amount, not to exceed one percent of the taxes imposed under this section, will be deposited into the local tax administration account created in the custody of the state treasurer. The department of revenue may spend money from this account, upon appropriation, for the administration of the local taxes imposed under this section.
(7) The state treasurer must distribute monthly to the district levying the tax as part of the regional transportation investment district plan, after the deductions for payments and expenditures as provided in RCW 46.68.090(1) (a) and (b).
(8) The proceeds of the additional taxes levied by a district in this section, to be used as a part of a regional transportation investment district plan, must be used in accordance with chapter 36.120 RCW, but only for those areas that are considered "highway purposes" as that term is construed in Article II, section 40 of the state Constitution.
(9) A district may only levy the tax under this section if the district is comprised of boundaries identical to the boundaries of a county or counties. A district may not levy the tax in this section if a member county is levying the tax in RCW 82.80.010 or 82.80.110.
[ 2014 c 216 s 205; 2013 c 225 s 643; 2010 c 106 s 233; 2006 c 311 s 18; 2003 c 350 s 3.]
Notes:
Effective date—Findings—Tax preference performance statement—2014 c 216: See notes following RCW 82.38.030.
Effective date—2013 c 225: See note following RCW 82.38.010.
Effective date—2010 c 106: See note following RCW 35.102.145.
Findings—2006 c 311: See note following RCW 36.120.020.

catchline: Motor vehicle and special fuel tax—Regional transportation investment district.


title: RCW 82.80.130

text:
(1) Public transportation benefit areas authorized to implement passenger-only ferry service under RCW 36.57A.200 whose boundaries (a) are on the Puget Sound, but (b) do not include an area where a regional transit authority has been formed, may submit an authorizing proposition to the voters and, if approved, may levy and collect an excise tax, at a rate approved by the voters, but not exceeding four-tenths of one percent on the value of every motor vehicle owned by a resident of the taxing district, solely for the purpose of providing passenger-only ferry service. The tax must be collected only at the time of vehicle registration renewal under *chapter 46.16 RCW. The tax will be imposed on vehicles previously registered in another state or nation when they are initially registered in this state. The tax will not be imposed at the time of sale by a licensed vehicle dealer. In a county imposing a motor vehicle excise tax surcharge under RCW 81.100.060, the maximum tax rate under this section must be reduced to a rate equal to four-tenths of one percent on the value less the equivalent motor vehicle excise tax rate of the surcharge imposed under RCW 81.100.060. This rate does not apply to vehicles registered under RCW 46.16A.455 with a scale weight more than six thousand pounds, or to vehicles registered under RCW 46.16A.425, 46.17.335, or 46.17.350(1)(c).
(2) The department of licensing shall administer and collect the tax in accordance with chapter 82.44 RCW. The department shall deduct a percentage amount, as provided by contract, not to exceed one percent of the taxes collected, for administration and collection expenses incurred by it. The remaining proceeds must be remitted to the custody of the state treasurer for monthly distribution to the public transportation benefit area.
(3) The public transportation benefit area imposing this tax shall delay the effective date at least six months from the date the fee is approved by the qualified voters of the authority area to allow the department of licensing to implement administration and collection of the tax.
(4) Before an authority may impose a tax authorized under this section, the authorization for imposition of the tax must be approved by a majority of the qualified electors of the authority area voting on that issue.
[ 2010 c 161 s 916; 2006 c 318 s 4; 2003 c 83 s 206.]
Notes:
*Reviser's note: Although directed to be recodified within chapter 46.16 RCW pursuant to chapter 161, Laws of 2010, a majority of chapter 46.16 RCW was recodified under chapter 46.16A RCW pursuant to RCW 1.08.015 (2)(k) and (3).
Effective date—Intent—Legislation to reconcile chapter 161, Laws of 2010 and other amendments made during the 2010 legislative session—2010 c 161: See notes following RCW 46.04.013.
Findings—Intent—Captions, part headings not law—Severability—Effective date—2003 c 83: See notes following RCW 36.57A.200.

catchline: Passenger-only ferry service—Local option motor vehicle excise tax authorized.


title: RCW 82.80.140

text:
(1) Subject to the provisions of RCW 36.73.065, a transportation benefit district under chapter 36.73 RCW may fix and impose an annual vehicle fee, not to exceed one hundred dollars per vehicle registered in the district, for each vehicle subject to vehicle license fees under RCW 46.17.350(1) (a), (c), (d), (e), (g), (h), (j), or (n) through (q) and for each vehicle subject to gross weight license fees under RCW 46.17.355 with a scale weight of six thousand pounds or less.
(2)(a) A district that includes all the territory within the boundaries of the jurisdiction, or jurisdictions, establishing the district may impose by a majority vote of the governing board of the district up to: (i) Twenty dollars of the vehicle fee authorized in subsection (1) of this section, (ii) forty dollars of the vehicle fee authorized in subsection (1) of this section if a twenty dollar vehicle fee has been imposed for at least twenty-four months, or (iii) fifty dollars of the vehicle fee authorized in subsection (1) of this section if a vehicle fee of forty dollars has been imposed for at least twenty-four months and a district has met the requirements of RCW 36.73.065(6).
If the district is countywide, the revenues of the fee must be distributed to each city within the district by interlocal agreement. The interlocal agreement is effective when approved by the district and sixty percent of the cities representing seventy-five percent of the population of the cities within the district in which the countywide fee is collected.
(b) A district may not impose a fee under this subsection (2):
(i) For a passenger-only ferry transportation improvement unless the vehicle fee is first approved by a majority of the voters within the jurisdiction of the district; or
(ii) That, if combined with the fees previously imposed by another district within its boundaries under RCW 36.73.065(4)(a)(i), exceeds fifty dollars.
If a district imposes or increases a fee under this subsection (2) that, if combined with the fees previously imposed by another district within its boundaries, exceeds fifty dollars, the district shall provide a credit for the previously imposed fees so that the combined vehicle fee does not exceed fifty dollars.
(3) The department of licensing shall administer and collect the fee. The department shall deduct a percentage amount, as provided by contract, not to exceed one percent of the fees collected, for administration and collection expenses incurred by it. The department shall remit remaining proceeds to the custody of the state treasurer. The state treasurer shall distribute the proceeds to the district on a monthly basis.
(4) No fee under this section may be collected until six months after approval under RCW 36.73.065.
(5) The vehicle fee under this section applies only when renewing a vehicle registration, and is effective upon the registration renewal date as provided by the department of licensing.
(6) The following vehicles are exempt from the fee under this section:
(a) Campers, as defined in RCW 46.04.085;
(b) Farm tractors or farm vehicles, as defined in RCW 46.04.180 and 46.04.181;
(c) Mopeds, as defined in RCW 46.04.304;
(d) Off-road and nonhighway vehicles, as defined in RCW 46.04.365;
(e) Private use single-axle trailer, as defined in RCW 46.04.422;
(f) Snowmobiles, as defined in RCW 46.04.546; and
(g) Vehicles registered under chapter 46.87 RCW and the international registration plan.
[ 2015 3rd sp.s. c 44 s 310; 2010 c 161 s 917; 2007 c 329 s 2; 2005 c 336 s 16.]
Notes:
Effective date—2015 3rd sp.s. c 44: See note following RCW 46.68.395.
Effective date—Intent—Legislation to reconcile chapter 161, Laws of 2010 and other amendments made during the 2010 legislative session—2010 c 161: See notes following RCW 46.04.013.
Effective date—2005 c 336: See note following RCW 36.73.015.

catchline: Vehicle fee—Transportation benefit district—Exemptions.


title: RCW 82.80.900

text: See notes following RCW 46.68.090.

catchline: Purpose—Effective dates—Application—Implementation—1990 c 42.


title: RCW 82.82.010

text:
The definitions in this section apply throughout this chapter unless the context clearly requires otherwise.
(1) "Applicant" means a person applying for a tax deferral under this chapter.
(2) "Corporate headquarters" means a facility or facilities where corporate staff employees are physically employed, and where the majority of the company's management services are handled either on a regional or a national basis. Company management services may include: Accounts receivable and payable, accounting, data processing, distribution management, employee benefit plan, financial and securities accounting, information technology, insurance, legal, merchandising, payroll, personnel, purchasing procurement, planning, reporting and compliance, research and development, tax, treasury, or other headquarters-related services. "Corporate headquarters" does not include a facility or facilities used for manufacturing, wholesaling, or warehousing.
(3) "Department" means the department of revenue.
(4) "Eligible area" means a designated community empowerment zone approved under RCW 43.31C.020.
(5)(a) "Eligible investment project" means an investment project in a qualified building or buildings in an eligible area, as defined in subsection (4) of this section, which will have employment at the qualified building or buildings of at least three hundred employees in qualified employment positions, each of whom must earn for the year reported at least the average annual wage for the state for that year as determined by the employment security department.
(b) The lessor or owner of a qualified building or buildings is not eligible for a deferral unless:
(i) The underlying ownership of the building or buildings vests exclusively in the same person; or
(ii)(A) The lessor by written contract agrees to pass the economic benefit of the deferral to the lessee;
(B) The lessee that receives the economic benefit of the deferral agrees in writing with the department to complete the annual tax performance report required under RCW 82.82.020; and
(C) The economic benefit of the deferral passed to the lessee is no less than the amount of tax deferred by the lessor and is evidenced by written documentation of any type of payment, credit, or other financial arrangement between the lessor or owner of the qualified building and the lessee.
(6) "Investment project" means a capital investment of at least thirty million dollars in a qualified building or buildings including tangible personal property and fixtures that will be incorporated as an ingredient or component of such buildings during the course of their construction, and including labor and services rendered in the planning, installation, and construction of the project.
(7) "Manufacture" has the same meaning as provided in RCW 82.04.120.
(8) "Operationally complete" means a date no later than one year from the date the project is issued an occupancy permit by the local permit issuing authority.
(9) "Person" has the same meaning as provided in RCW 82.04.030.
(10) "Qualified building or buildings" means construction of a new structure or structures or expansion of an existing structure or structures to be used for corporate headquarters. If a building is used partly for corporate headquarters and partly for other purposes, the applicable tax deferral is determined by apportionment of the costs of construction under rules adopted by the department.
(11) "Qualified employment position" means a permanent full-time employee employed in the eligible investment project during the entire tax year. The term "entire tax year" means a full-time position that is filled for a period of twelve consecutive months. The term "full-time" means at least thirty-five hours a week, four hundred fifty-five hours a quarter, or one thousand eight hundred twenty hours a year.
(12) "Recipient" means a person receiving a tax deferral under this chapter.
(13) "Warehouse" means a building or structure, or any part thereof, in which goods, wares, or merchandise are received for storage for compensation.
(14) "Wholesale sale" has the same meaning as provided in RCW 82.04.060.
[ 2020 c 139 s 46; 2008 c 15 s 1.]
Notes:
Effective date—2008 c 15: "This act takes effect July 1, 2009." [ 2008 c 15 s 10.]

catchline: Definitions.


title: RCW 82.82.020

text:
(1) Application for deferral of taxes under this chapter can be made at any time prior to completion of construction of a qualified building or buildings, but tax liability incurred prior to the department's receipt of an application may not be deferred. The application must be made to the department in a form and manner prescribed by the department. The application must contain information regarding the location of the investment project, the applicant's average employment in the state for the prior year, estimated or actual new employment related to the project, estimated or actual wages of employees related to the project, estimated or actual costs, time schedules for completion and operation, and other information required by the department. The department must rule on the application within sixty days.
(2) Applications for deferral of taxes under this section may not be made after December 31, 2020.
(3) Each recipient of a deferral of taxes under this chapter must file a complete annual tax performance report with the department under RCW 82.32.534. If the economic benefits of the deferral are passed to a lessee as provided in RCW 82.82.010(5), the lessee must file a complete annual tax performance report, and the applicant is not required to file the annual tax performance report.
(4) A recipient who must repay deferred taxes under RCW 82.82.040 because the department has found that an investment project is no longer an eligible investment project is no longer required to file annual tax performance reports under RCW 82.32.534 beginning on the date an investment project is used for nonqualifying purposes.
[ 2017 c 135 s 43; 2010 c 114 s 148; 2008 c 15 s 2.]
Notes:
Effective date—2017 c 135: See note following RCW 82.32.534.
Application—Finding—Intent—2010 c 114: See notes following RCW 82.32.534.
Effective date—2008 c 15: See note following RCW 82.82.010.

catchline: Application for deferral—Annual tax performance report.


title: RCW 82.82.030

text:
(1) The department must issue a sales and use tax deferral certificate for state and local sales and use taxes due under chapters 82.08, 82.12, and 82.14 RCW on each eligible investment project meeting the requirements of this chapter.
(2) No certificate may be issued for an investment project that has already received a deferral under chapter 82.60 or 82.63 RCW or this chapter, except that an investment project for qualified research and development that has already received a deferral may also receive an additional deferral certificate for adapting the investment project for use in pilot scale manufacturing.
(3) The department must keep a running total of all deferrals granted under this chapter during each fiscal biennium.
(4) The number of eligible investment projects for which the benefits of this chapter will be allowed is limited to two per biennium. The department must approve deferral certificates for completed applications on a first-in-time basis. During any biennium, only one deferral certificate may be issued per community empowerment zone.
[ 2008 c 15 s 3.]
Notes:
Effective date—2008 c 15: See note following RCW 82.82.010.

catchline: Deferral certificate.


title: RCW 82.82.040

text:
(1) Except as provided in subsection (2) of this section and RCW 82.32.534, taxes deferred under this chapter need not be repaid.
(2)(a) If, on the basis of the tax performance report under RCW 82.32.534 or other information, the department finds that an investment project is no longer an "eligible investment project" under RCW 82.82.010 at any time during the calendar year in which the investment project is certified by the department as having been operationally completed, or at any time during any of the seven succeeding calendar years, a portion of deferred taxes are immediately due according to the following schedule:
Year in which use occurs
% of deferred taxes due
1
100%
2
87.5%
3
75%
4
62.5%
5
50%
6
37.5%
7
25%
8
12.5%
(b) If the economic benefits of the deferral are passed to a lessee as provided in RCW 82.82.010(5), the lessee is responsible for payment to the extent the lessee has received the economic benefit.
(3) The department must assess interest at the rate provided for delinquent taxes under chapter 82.32 RCW, but not penalties, retroactively to the date of deferral. The debt for deferred taxes will not be extinguished by insolvency or other failure of the recipient. Transfer of ownership does not terminate the deferral. The deferral is transferred, subject to the successor meeting the eligibility requirements of this chapter, for the remaining periods of the deferral.
[ 2017 c 135 s 44; 2010 c 114 s 149; 2008 c 15 s 5.]
Notes:
Effective date—2017 c 135: See note following RCW 82.32.534.
Application—Finding—Intent—2010 c 114: See notes following RCW 82.32.534.
Effective date—2008 c 15: See note following RCW 82.82.010.

catchline: Repayment of deferred taxes.


title: RCW 82.82.050

text:
The qualified employment positions must be filled by the end of the calendar year following the year in which the project is certified as operationally complete. If a recipient does not meet the requirements for qualified employment positions by the end of the second calendar year following the year in which the project is certified as operationally complete, all deferred taxes are immediately due.
[ 2008 c 15 s 6.]
Notes:
Effective date—2008 c 15: See note following RCW 82.82.010.


title: RCW 82.84.010

text:
This chapter may be known and cited as the "keep groceries affordable act of 2018."
[ 2019 c 2 s 1 (Initiative Measure No. 1634, approved November 6, 2018).]

catchline: Short title.


title: RCW 82.84.020

text:
(1) Whereas access to food is a basic human need of every Washingtonian; and
(2) Whereas keeping the price of groceries as low as possible improves the access to food for all Washingtonians; and
(3) Whereas taxing groceries is regressive and hurts low- and fixed-income Washingtonians the most; and
(4) Whereas working families in Washington pay a greater share of their family income in state and local taxes than their wealthier counterparts; now, therefore,
(5) The people of the state of Washington find and declare that no local governmental entity may impose any new tax, fee, or other assessment that targets grocery items.
[ 2019 c 2 s 2 (Initiative Measure No. 1634, approved November 6, 2018).]

catchline: Findings and declarations.


title: RCW 82.84.030

text:
For purposes of this chapter:
(1) "Alcoholic beverages" has the same meaning as provided in RCW 82.08.0293.
(2) "Groceries" means any raw or processed food or beverage, or any ingredient thereof, intended for human consumption except alcoholic beverages, cannabis products, and tobacco. "Groceries" includes, but is not limited to, meat, poultry, fish, fruits, vegetables, grains, bread, milk, cheese and other dairy products, nonalcoholic beverages, kombucha with less than 0.5% alcohol by volume, condiments, spices, cereals, seasonings, leavening agents, eggs, cocoa, teas, and coffees whether raw or processed.
(3) "Local governmental entity" has the same meaning as provided in RCW 4.96.010.
(4) "Cannabis products" has the same meaning as provided in RCW 69.50.101.
(5) "Tax, fee, or other assessment on groceries" includes, but is not limited to, a sales tax, gross receipts tax, business and occupation tax, business license tax, excise tax, privilege tax, or any other similar levy, charge, or exaction of any kind on groceries or the manufacture, distribution, sale, possession, ownership, transfer, transportation, container, use, or consumption thereof.
(6) "Tobacco" has the same meaning as provided in RCW 82.08.0293.
[ 2022 c 16 s 165; 2019 c 2 s 3 (Initiative Measure No. 1634, approved November 6, 2018).]
Notes:
Intent—Finding—2022 c 16: See note following RCW 69.50.101.


title: RCW 82.84.040

text:
Notwithstanding any other law to the contrary:
(1) Except as provided in subsections (2) through (4) of this section, a local governmental entity may not impose or collect any tax, fee, or other assessment on groceries.
(2) Nothing in this section precludes the continued collection of any existing tax, fee, or other assessment on groceries as is in effect as of January 15, 2018; but no existing tax, fee, or other assessment on groceries may be increased in rate, scope, base, or otherwise after January 15, 2018, except as provided in subsections (3) and (4) of this section.
(3) Nothing in this section prohibits the imposition and collection of a tax, fee, or other assessment on groceries if:
(a) The tax, fee, or other assessment is generally applicable to a broad range of businesses and business activity; and
(b) The tax, fee, or other assessment does not establish or rely on a classification related to or involving groceries or a subset of groceries for purposes of establishing or otherwise resulting in a higher tax rate due to such classification.
(4) Nothing in this section prohibits the imposition and collection of a local retail sales and use tax pursuant to RCW 82.14.030 on those persons taxable by the state under chapters 82.08 and 82.12 RCW.
[ 2019 c 2 s 4 (Initiative Measure No. 1634, approved November 6, 2018).]

catchline: Grocery tax, fee, and assessment exemption.


title: RCW 82.84.050

text:
Notwithstanding any other law to the contrary:
(1) This chapter applies to any tax, fee, or other assessment on groceries first imposed, increased, or collected by a local governmental entity on or after January 15, 2018.
(2) The provisions of this chapter are to be construed liberally so as to effectuate their intent, policy, and purposes.
[ 2019 c 2 s 5 (Initiative Measure No. 1634, approved November 6, 2018).]

catchline: Application.


title: RCW 82.85.030

text:
The lessor or owner of a qualified building is not eligible for a deferral unless:
(1) The underlying ownership of the building, machinery, and equipment vests exclusively in the same person; or
(2)(a) The lessor by written contract agrees to pass the economic benefit of the deferral to the lessee;
(b) The lessee that receives the economic benefit of the deferral agrees in writing with the department to complete the annual tax performance report required under RCW 82.32.534; and
(c) The economic benefit of the deferral passed to the lessee is no less than the amount of tax deferred by the lessor and is evidenced by written documentation of any type of payment, credit, or other financial arrangement between the lessor or owner of the qualified building and the lessee.
[ 2020 c 139 s 47; 2015 3rd sp.s. c 6 s 403.]
Notes:
Reviser's note: For information on the expiration of tax preferences, see RCW 82.32.805.
Effective dates—2015 3rd sp.s. c 6: See note following RCW 82.04.4266.

catchline: Deferral eligibility—Lessor or owner of qualified building.


title: RCW 82.85.050

text:
(1) Except as otherwise provided in subsection (2) of this section, the department must issue a sales and use tax deferral certificate for state and local sales and use taxes due under chapters 82.08, 82.12, 82.14, and 81.104 RCW on each eligible investment project.
(2) No certificate may be issued for an investment project that has already received a deferral under this part [chapter] or chapter 82.60 RCW.
(3) The department must keep a running total of all deferrals granted under this chapter during each fiscal biennium.
[ 2015 3rd sp.s. c 6 s 405.]
Notes:
Reviser's note: For information on the expiration of tax preferences, see RCW 82.32.805.
Effective dates—2015 3rd sp.s. c 6: See note following RCW 82.04.4266.

catchline: Deferral certificate—Issued by the department.


title: RCW 82.85.060

text:
(1) The recipient must begin paying the deferred taxes in the fifth year after the date certified by the department as the date on which the investment project has been operationally completed. The first payment of ten percent of the deferred taxes will be due on December 31st of the fifth calendar year after such certified date, with subsequent annual payments of ten percent of the deferred taxes due on December 31st for each of the following nine years.
(2) The department may authorize an accelerated repayment schedule upon request of the recipient.
(3) Interest may not be charged on any taxes deferred under this chapter for the period of deferral, although all other penalties and interest applicable to delinquent excise taxes may be assessed and imposed for delinquent payments under this chapter. The debt for deferred taxes will not be extinguished by insolvency or other failure of the recipient. Transfer of ownership does not terminate the deferral. The deferral is transferred, subject to the successor meeting the eligibility requirements of this chapter, for the remaining periods of the deferral.
[ 2015 3rd sp.s. c 6 s 406.]
Notes:
Application—2015 3rd sp.s. c 6 ss 406-409: "The expiration provisions of RCW 82.32.805(1)(a) do not apply to sections 406 through 409 of this act." [ 2015 3rd sp.s. c 6 s 411.]
Effective dates—2015 3rd sp.s. c 6: See note following RCW 82.04.4266.

catchline: Repayment—Deferred taxes.


title: RCW 82.85.070

text:
(1) State taxes deferred and repaid under this chapter, including any interest or penalties on such amounts, must be deposited in the invest in Washington account created in this section. The invest in Washington account is hereby created in the state treasury [and] must be used exclusively by the state board for community and technical colleges for supporting customized training programs, job skills programs, job readiness training, workforce professional development, and to assist employers with state-approved apprenticeship programs for manufacturing and production occupations.
(2) Revenues to the invest in Washington account consist of amounts transferred by the state treasurer as provided in subsection (3) of this section.
(3) By June 1, 2016, and by June 1st of every subsequent year, the department must notify the state treasurer of the amount of tax, interest, and penalties collected under this section since September 1, 2015, through May 1, 2016, in the case of the first notification under this subsection (3), and since the previous May 1st for subsequent notifications under this subsection (3). The department may make adjustments to the annual notification under this subsection (3) as may be necessary to correct errors in the previous notification or offset previous amounts that did not qualify for deferral under this section.
(4) By July 1, 2016, and by July 1st of every subsequent year, the state treasurer must transfer the amount included in the department's most recent notification under subsection (3) of this section from the general fund to the invest in Washington account. Money in the account may only be appropriated for the purposes specified in subsection (1) of this section.
[ 2015 3rd sp.s. c 6 s 407.]
Notes:
Application—2015 3rd sp.s. c 6 ss 406-409: See note following RCW 82.85.060.
Effective dates—2015 3rd sp.s. c 6: See note following RCW 82.04.4266.

catchline: Invest in Washington account—Created—Funded.


title: RCW 82.85.080

text:
(1) Each recipient of a deferral of taxes granted under this chapter must file a complete annual tax performance report with the department under RCW 82.32.534. If the economic benefits of the deferral are passed to a lessee as provided in RCW 82.85.030, the lessee must file a complete annual tax performance report, and the applicant is not required to file a complete annual tax performance report.
(2) If, on the basis of a tax performance report under RCW 82.32.534 or other information, the department finds that an investment project is not eligible for tax deferral under this chapter due to the fact the investment project is no longer used for qualified activities, the amount of deferred taxes outstanding for the investment project is immediately due and payable.
(3) If the economic benefits of a tax deferral under this chapter are passed to a lessee as provided in RCW 82.85.030, the lessee is responsible for payment to the extent the lessee has received the economic benefit.
[ 2020 c 139 s 48; 2015 3rd sp.s. c 6 s 408.]
Notes:
Application—2015 3rd sp.s. c 6 ss 406-409: See note following RCW 82.85.060.
Effective dates—2015 3rd sp.s. c 6: See note following RCW 82.04.4266.

catchline: Annual tax performance report.


title: RCW 82.85.900

text:
This part [chapter] may be known and cited as the invest in Washington act.
[ 2015 3rd sp.s. c 6 s 409.]
Notes:
Application—2015 3rd sp.s. c 6 ss 406-409: See note following RCW 82.85.060.
Effective dates—2015 3rd sp.s. c 6: See note following RCW 82.04.4266.


title: RCW 82.86.010

text:
(1) The definitions in this section apply throughout this chapter unless the context clearly requires otherwise.
(a) "988 crisis hotline" has the same meaning as in RCW 71.24.025.
(b) "Crisis call center hub" has the same meaning as in *RCW 71.24.025.
(2) The definitions in RCW 82.14B.020 apply to this chapter.
[ 2021 c 302 s 201.]
Notes:
*Reviser's note: RCW 71.24.025 was amended by 2023 c 454 s 1, deleting the definition of "crisis call center hub."
Effective date—2021 c 302 ss 201-205: "Sections 201 through 205 of this act take effect October 1, 2021." [ 2021 c 302 s 405.]
Findings—Intent—2021 c 302: See note following RCW 71.24.890.


title: RCW 82.86.020

text:
(1)(a) A statewide 988 behavioral health crisis response and suicide prevention line tax is imposed on the use of all radio access lines:
(i) By subscribers whose place of primary use is located within the state in the amount set forth in (a)(ii) of this subsection (1) per month for each radio access line. The tax must be uniform for each radio access line under this subsection (1); and
(ii) By consumers whose retail transaction occurs within the state in the amount set forth in this subsection (1)(a)(ii) per retail transaction. The amount of tax must be uniform for each retail transaction under this subsection (1) and is as follows:
(A) Beginning October 1, 2021, through December 31, 2022, the tax rate is 24 cents for each radio access line; and
(B) Beginning January 1, 2023, the tax rate is 40 cents for each radio access line.
(b) The tax imposed under this subsection (1) must be remitted to the department by radio communications service companies, including those companies that resell radio access lines, and sellers of prepaid wireless telecommunications service, on a tax return provided by the department. Tax proceeds must be deposited by the treasurer into the statewide 988 behavioral health crisis response and suicide prevention line account created in RCW 82.86.050.
(c) For the purposes of this subsection (1), the retail transaction is deemed to occur at the location where the transaction is sourced under RCW 82.32.520(3)(c).
(2) A statewide 988 behavioral health crisis response and suicide prevention line tax is imposed on all interconnected voice over internet protocol service lines in the state. The amount of tax must be uniform for each line and must be levied on no more than the number of voice over internet protocol service lines on an account that is capable of simultaneous unrestricted outward calling to the public switched telephone network. The tax imposed under this subsection (2) must be remitted to the department by interconnected voice over internet protocol service companies on a tax return provided by the department. The amount of tax for each interconnected voice over internet protocol service line whose place of primary use is located in the state is as follows:
(a) Beginning October 1, 2021, through December 31, 2022, the tax rate is 24 cents for an interconnected voice over internet protocol service line; and
(b) Beginning January 1, 2023, the tax rate is 40 cents for an interconnected voice over internet protocol service line.
(3) A statewide 988 behavioral health crisis response and suicide prevention line tax is imposed on all switched access lines in the state. The amount of tax must be uniform for each line and must be levied on no more than the number of switched access lines on an account that is capable of simultaneous unrestricted outward calling to the public switched telephone network. The tax imposed under this subsection (3) must be remitted to the department by local exchange companies on a tax return provided by the department. The amount of tax for each switched access line whose place of primary use is located in the state is as follows:
(a) Beginning October 1, 2021, through December 31, 2022, the tax rate is 24 cents for each switched access line; and
(b) Beginning January 1, 2023, the tax rate is 40 cents for each switched access line.
(4) Tax proceeds collected pursuant to this section must be deposited by the treasurer into the statewide 988 behavioral health crisis response and suicide prevention line account created in RCW 82.86.050.
[ 2021 c 302 s 202.]
Notes:
Effective date—2021 c 302 ss 201-205: See note following RCW 82.86.010.
Findings—Intent—2021 c 302: See note following RCW 71.24.890.

catchline: Tax imposed.


title: RCW 82.86.030

text:
(1) Except as provided otherwise in subsection (2) of this section:
(a) The statewide 988 behavioral health crisis response and suicide prevention line tax on radio access lines must be collected from the subscriber by the radio communications service company, including those companies that resell radio access lines, providing the radio access line to the subscriber, and the seller of prepaid wireless telecommunications services.
(b) The statewide 988 behavioral health crisis response and suicide prevention line tax on interconnected voice over internet protocol service lines must be collected from the subscriber by the interconnected voice over internet protocol service company providing the interconnected voice over internet protocol service line to the subscriber.
(c) The statewide 988 behavioral health crisis response and suicide prevention line tax on switched access lines must be collected from the subscriber by the local exchange company.
(d) The amount of the tax must be stated separately on the billing statement which is sent to the subscriber.
(2)(a) The statewide 988 behavioral health crisis response and suicide prevention line tax imposed by this chapter must be collected from the consumer by the seller of a prepaid wireless telecommunications service for each retail transaction occurring in this state.
(b) The department must transfer all tax proceeds remitted by a seller under this subsection (2) to the statewide 988 behavioral health crisis response and suicide prevention line account created in RCW 82.86.050.
(c) The taxes required by this subsection to be collected by the seller must be separately stated in any sales invoice or instrument of sale provided to the consumer.
[ 2021 c 302 s 203.]
Notes:
Effective date—2021 c 302 ss 201-205: See note following RCW 82.86.010.
Findings—Intent—2021 c 302: See note following RCW 71.24.890.

catchline: Collection of tax.


title: RCW 82.86.040

text:
(1)(a) The statewide 988 behavioral health crisis response and suicide prevention line tax imposed by this chapter must be paid by the subscriber to the radio communications service company providing the radio access line, the local exchange company, or the interconnected voice over internet protocol service company providing the interconnected voice over internet protocol service line.
(b) Each radio communications service company, each local exchange company, and each interconnected voice over internet protocol service company, must collect from the subscriber the full amount of the taxes payable. The statewide 988 behavioral health crisis response and suicide prevention line tax required by this chapter to be collected by a company or seller, are deemed to be held in trust by the company or seller until paid to the department. Any radio communications service company, local exchange company, or interconnected voice over internet protocol service company that appropriates or converts the tax collected to its own use or to any use other than the payment of the tax to the extent that the money collected is not available for payment on the due date as prescribed in this chapter is guilty of a gross misdemeanor.
(2) If any radio communications service company, local exchange company, or interconnected voice over internet protocol service company fails to collect the statewide 988 behavioral health crisis response and suicide prevention line tax or, after collecting the tax, fails to pay it to the department in the manner prescribed by this chapter, whether such failure is the result of its own act or the result of acts or conditions beyond its control, the company or seller is personally liable to the state for the amount of the tax, unless the company or seller has taken from the buyer in good faith documentation, in a form and manner prescribed by the department, stating that the buyer is not a subscriber or consumer or is otherwise not liable for the statewide 988 behavioral health crisis response and suicide prevention line tax.
(3) The amount of tax, until paid by the subscriber to the radio communications service company, local exchange company, the interconnected voice over internet protocol service company, or to the department, constitutes a debt from the subscriber to the company, or from the consumer to the seller. Any company or seller that fails or refuses to collect the tax as required with intent to violate the provisions of this chapter or to gain some advantage or benefit, either direct or indirect, and any subscriber or consumer who refuses to pay any tax due under this chapter is guilty of a misdemeanor. The statewide 988 behavioral health crisis response and suicide prevention line tax required by this chapter to be collected by the radio communications service company, local exchange company, or interconnected voice over internet protocol service company must be stated separately on the billing statement that is sent to the subscriber.
(4) If a subscriber has failed to pay to the radio communications service company, local exchange company, or interconnected voice over internet protocol service company, the statewide 988 behavioral health crisis response and suicide prevention line tax imposed by this chapter and the company or seller has not paid the amount of the tax to the department, the department may, in its discretion, proceed directly against the subscriber or consumer for collection of the tax, in which case a penalty of 10 percent may be added to the amount of the tax for failure of the subscriber or consumer to pay the tax to the company or seller, regardless of when the tax is collected by the department.
[ 2021 c 302 s 204.]
Notes:
Effective date—2021 c 302 ss 201-205: See note following RCW 82.86.010.
Findings—Intent—2021 c 302: See note following RCW 71.24.890.

catchline: Payment and collection.


title: RCW 82.86.050

text:
(1) The statewide 988 behavioral health crisis response and suicide prevention line account is created in the state treasury. All receipts from the statewide 988 behavioral health crisis response and suicide prevention line tax imposed pursuant to this chapter must be deposited into the account. Moneys may only be spent after appropriation.
(2) Expenditures from the account may only be used for:
(a) Ensuring the efficient and effective routing of calls made to the 988 crisis hotline to an appropriate crisis hotline center or designated 988 contact hub;
(b) Personnel and the provision of acute behavioral health, crisis outreach, and crisis stabilization services, as defined in RCW 71.24.025, by directly responding to the 988 crisis hotline and enhancing mobile crisis service standards and performance provided through mobile rapid response crisis teams and community-based crisis teams endorsed under RCW 71.24.903. Ten percent of the annual receipts from the tax must be dedicated to the establishment grants, performance payments, and supplemental performance payments for mobile rapid response crisis teams and community-based crisis teams endorsed under RCW 71.24.903 and endorsement activities in RCW 71.24.903, up to 30 percent of which is dedicated to mobile rapid response crisis teams and community-based crisis teams endorsed under RCW 71.24.903 that are affiliated with a tribe in Washington; and
(c) During the 2025-2027 fiscal biennium, the legislature may appropriate moneys from the statewide 988 behavioral health crisis response and suicide prevention line account to maintain and expand behavioral health crisis response services including services provided by mobile crisis response teams, 23-hour crisis relief centers, and other community settings providing services to individuals experiencing a behavioral health crisis. Appropriations made for these purposes are not subject to the limitation in subsection (3) of this section. It is the intent of the legislature that this policy will be continued in subsequent fiscal biennia.
(3) Moneys in the account may not be used to supplant general fund appropriations for behavioral health services or for medicaid covered services to individuals enrolled in the medicaid program.
[ 2025 c 424 s 991; 2023 c 454 s 10; 2021 c 302 s 205.]
Notes:
Effective date—2025 c 424: See note following RCW 9.46.100.
Effective date—2021 c 302 ss 201-205: See note following RCW 82.86.010.
Findings—Intent—2021 c 302: See note following RCW 71.24.890.

catchline: Account creation.


title: RCW 82.86.060

text:
A city or county may not impose a tax, measured on a per line basis, on radio access lines, interconnected voice over internet protocol service lines, or switched access lines, for the purpose of ensuring the efficient and effective routing of calls made to the 988 crisis hotline to an appropriate crisis hotline center or crisis call center hub; or providing personnel or acute behavioral health, crisis outreach, or crisis stabilization services, as defined in RCW 71.24.025, associated with directly responding to the 988 crisis hotline.
[ 2021 c 302 s 206.]
Notes:
Findings—Intent—2021 c 302: See note following RCW 71.24.890.

catchline: Preemption.


title: RCW 82.87.010

text:
The legislature finds that it is the paramount duty of the state to amply provide every child in the state with an education, creating the opportunity for the child to succeed in school and thrive in life. The legislature further finds that high quality early learning and child care is critical to a child's success in school and life, as it supports the development of the child's social-emotional, physical, cognitive, and language skills. Therefore, the legislature will invest in the ongoing support of K-12 education and early learning and child care by dedicating revenues from chapter 196, Laws of 2021 to the education legacy trust account and the common school construction account [fund].
The legislature further recognizes that a tax system that is fair, balanced, and works for everyone is essential to help all Washingtonians grow and thrive. But Washington's tax system today is the most regressive in the nation because it asks those making the least to pay the most as a percentage of their income. Middle-income families in Washington pay two to four times more in taxes, as a percentage of household income, as compared to top earners in the state. Low-income Washingtonians pay at least six times more than do our wealthiest residents.
To help meet the state's paramount duty, the legislature intends to levy a seven percent tax on the voluntary sale or exchange of stocks, bonds, and other capital assets where the profit is in excess of $250,000 annually to fund K-12 education, early learning, and child care, and advance our paramount duty to amply provide an education to every child in the state. The legislature recognizes that levying this tax will have the additional effect of making material progress toward rebalancing the state's tax code.
The legislature further intends to exempt certain assets from the tax including, but not limited to, qualified family-owned small businesses, all residential and other real property, and retirement accounts.
[ 2021 c 196 s 1.]
Notes:
Automatic expiration date and tax preference performance statement exemption—2021 c 196: "The provisions of RCW 82.32.805 and 82.32.808 do not apply to this act." [ 2021 c 196 s 18.]

catchline: Findings—Intent—2021 c 196.


title: RCW 82.87.020

text:
The definitions in this section apply throughout this chapter unless the context clearly requires otherwise.
(1) "Adjusted capital gain" means federal net long-term capital gain:
(a) Plus any amount of long-term capital loss from a sale or exchange that is exempt from the tax imposed in this chapter, to the extent such loss was included in calculating federal net long-term capital gain;
(b) Plus any amount of long-term capital loss from a sale or exchange that is not allocated to Washington under RCW 82.87.100, to the extent such loss was included in calculating federal net long-term capital gain;
(c) Plus any amount of long-term capital loss carryover that is carried forward from a sale or exchange that is not allocated to Washington under RCW 82.87.100, to the extent such loss was included in calculating federal net long-term capital gain;
(d) Plus any amount of long-term capital loss carryover that is carried forward from a sale or exchange that is exempt from the tax imposed in this chapter, to the extent such loss was included in calculating federal net long-term capital gain;
(e) Plus any amount of long-term capital loss carryover that is carried forward from a sale or exchange that occurred before January 1, 2022, to the extent such loss was included in calculating federal net long-term capital gain;
(f) Plus any amount of long-term capital gain or loss from the sale or exchange of a section 1256 contract held for more than one year not included in the calculation of federal net long-term capital gain that would otherwise be included if Title 26 U.S.C. Sec. 1256 of the internal revenue code did not exist;
(g) Less any amount of long-term capital gain from a sale or exchange that is not allocated to Washington under RCW 82.87.100, to the extent such gain was included in calculating federal net long-term capital gain; and
(h) Less any amount of long-term capital gain from a sale or exchange that is exempt from the tax imposed in this chapter, to the extent such gain was included in calculating federal net long-term capital gain.
(2) "Capital asset" has the same meaning as provided by Title 26 U.S.C. Sec. 1221 of the internal revenue code and also includes any other property if the sale or exchange of the property results in a gain that is treated as a long-term capital gain under Title 26 U.S.C. Sec. 1231 or any other provision of the internal revenue code.
(3) "Federal net long-term capital gain" means the net long-term capital gain reportable for federal income tax purposes determined as if Title 26 U.S.C. Secs. 55 through 59, 164, 1256, 1400Z-1, and 1400Z-2 of the internal revenue code did not exist.
(4) "Individual" means a natural person.
(5) "Intangible personal property" means personal property that is not tangible personal property.
(6) "Internal revenue code" means the United States internal revenue code of 1986, as amended, as of July 25, 2021, or such subsequent date as the department may provide by rule consistent with the purpose of this chapter.
(7) "Long-term capital asset" means a capital asset that is held for more than one year.
(8) "Long-term capital gain" means gain from the sale or exchange of a long-term capital asset.
(9) "Long-term capital loss" means a loss from the sale or exchange of a long-term capital asset.
(10) "Real estate" means land and fixtures affixed to land. "Real estate" also includes used mobile homes, used park model trailers, used floating homes, and improvements constructed upon leased land.
(11)(a) "Resident" means an individual:
(i) Who is domiciled in this state during the taxable year, unless the individual (A) maintained no permanent place of abode in this state during the entire taxable year, (B) maintained a permanent place of abode outside of this state during the entire taxable year, and (C) spent in the aggregate not more than 30 days of the taxable year in this state; or
(ii) Who is not domiciled in this state during the taxable year, but maintained a place of abode and was physically present in this state for more than 183 days during the taxable year.
(b) For purposes of this subsection, "day" means a calendar day or any portion of a calendar day.
(c) An individual who is a resident under (a) of this subsection is a resident for that portion of a taxable year in which the individual was domiciled in this state or maintained a place of abode in this state.
(12) "Section 1256 contract" has the same meaning as provided by Title 26 U.S.C. Sec. 1256 of the internal revenue code.
(13) "Tangible personal property" means personal property that can be seen, weighed, measured, felt, or touched. "Tangible personal property" does not include steam, electricity, or electrical energy.
(14) "Taxable year" means the taxpayer's taxable year as determined under the internal revenue code.
(15) "Taxpayer" means an individual subject to tax under this chapter.
(16) "Washington capital gains" means an individual's adjusted capital gain, as modified in RCW 82.87.060, for each return filed under this chapter.
[ 2026 c 191 s 2; 2025 c 409 s 4; 2021 c 196 s 4.]
Notes:
Effective date—2025 c 409 ss 3, 4, 8, 10, and 15: See note following RCW 82.87.160.
Automatic expiration date and tax preference performance statement exemption—2021 c 196: See note following RCW 82.87.010.

catchline: Definitions.


title: RCW 82.87.030

text:
(1) All taxes, interest, and penalties collected under this chapter shall be distributed as follows, except as provided in subsection (3) of this section during the 2025-2027 fiscal biennium:
(a) The first $500,000,000 collected each fiscal year shall be deposited into the education legacy trust account created in RCW 83.100.230; and
(b) Any remainder collected each fiscal year shall be deposited into the common school construction fund.
(2) The amounts specified under subsection (1)(a) of this section shall be adjusted annually as provided under RCW 82.87.150.
(3) During the 2025-2027 fiscal biennium, all taxes, interest, and penalties collected under this chapter shall be deposited into the education legacy trust account.
[ 2026 c 268 s 940; 2021 c 196 s 2.]
Notes:
Effective date—2026 c 268: See note following RCW 28B.15.210.
Automatic expiration date and tax preference performance statement exemption—2021 c 196: See note following RCW 82.87.010.

catchline: Distribution of revenues.


title: RCW 82.87.040

text:
(1)(a) Beginning January 1, 2022, an excise tax is imposed on the sale or exchange of long-term capital assets. Only individuals are subject to payment of the tax, which equals seven percent multiplied by an individual's Washington capital gains.
(b) Beginning January 1, 2025, an additional excise tax is imposed on the sale or exchange of long-term capital assets, which equals 2.90 percent multiplied by the portion of an individual's Washington capital gains exceeding $1,000,000.
(2) The tax levied in subsection (1) of this section is necessary for the support of the state government and its existing public institutions.
(3) If an individual's Washington capital gains are less than zero for a taxable year, no tax is due under this section and no such amount is allowed as a carryover for use in the calculation of that individual's adjusted capital gain, as defined in RCW 82.87.020(1), for any taxable year. To the extent that a loss carryforward is included in the calculation of an individual's federal net long-term capital gain and that loss carryforward is directly attributable to losses from sales or exchanges allocated to this state under RCW 82.87.100, the loss carryforward is included in the calculation of that individual's adjusted capital gain for the purposes of this chapter. An individual may not include any losses carried back for federal income tax purposes in the calculation of that individual's adjusted capital gain for any taxable year.
(4)(a) The tax imposed in this section applies to the sale or exchange of long-term capital assets owned by the taxpayer, whether the taxpayer was the legal or beneficial owner of such assets at the time of the sale or exchange. The tax applies when the Washington capital gains are recognized by the taxpayer in accordance with this chapter.
(b) For purposes of this chapter:
(i) An individual is considered to be a beneficial owner of long-term capital assets held by an entity that is a pass-through or disregarded entity for federal tax purposes, such as a partnership, limited liability company, S corporation, or grantor trust, to the extent of the individual's ownership interest in the entity as reported for federal income tax purposes.
(ii) A nongrantor trust is deemed to be a grantor trust if the trust does not qualify as a grantor trust for federal tax purposes, and the grantor's transfer of assets to the trust is treated as an incomplete gift under Title 26 U.S.C. Sec. 2511 of the internal revenue code and its accompanying regulations. A grantor of such trust is considered the beneficial owner of the capital assets of the trust for purposes of the tax imposed in this section and must include any long-term capital gain or loss from the sale or exchange of a capital asset by the trust in the calculation of that individual's adjusted capital gain, if such gain or loss is allocated to this state under RCW 82.87.100.
[ 2025 c 421 s 101; 2021 c 196 s 5.]
Notes:
Application—2025 c 421 s 101: "Section 101 of this act applies to taxes imposed in calendar year 2025 for collection in calendar year 2026." [ 2025 c 421 s 301.]
Findings—Intent—2025 c 421: "(1) The legislature finds that it is the paramount duty of the state to amply provide every child in the state with an education, creating the opportunity for the child to succeed in school and thrive in life. The legislature further finds that high quality early learning and child care is critical to a child's success in school and life, as it supports the development of the child's social-emotional, physical, cognitive, and language skills. The legislature further finds that the state's higher education system ensures Washington residents have the opportunity to succeed in a competitive global economy.
(2) The legislature further finds that in 2024, when given the opportunity to retain investments in the education legacy trust account for high quality early learning and child care, 64.11 percent of Washington voters in 32 of its 39 counties voted to uphold the excise tax on sales of long-term capital assets for this purpose.
(3) Therefore, the legislature will fund ongoing support of public K-12 education, early learning and child care, and higher education, by dedicating revenues from this act to the education legacy trust account. The legislature further recognizes that a tax system that is fair, balanced, and works for everyone is essential to help all Washingtonians grow and thrive. Washington's tax system remains the second most regressive in the nation as it asks those with the least to pay the most as a percentage of their income. Low-income Washingtonians pay at least three times more in state and local taxes as a percentage of their income than the state's highest-income households.
(4) To help increase funding to the education legacy trust account, the legislature intends to levy an additional excise tax on the sale or exchange of long-term capital assets, which equals 2.90 percent multiplied by the portion of an individual's Washington capital gains exceeding $1,000,000, and by creating a more progressive rate structure for the estate tax by increasing the top tier rates up to 35 percent. Further, the legislature intends to increase the exclusion amount to $3,000,000 for the estate tax. The legislature recognizes that levying these taxes with a more progressive rate structure, and increasing the exclusion amount for the estate tax, will have the additional effect of making material progress toward rebalancing the state's tax code." [ 2025 c 421 s 1.]
Savings—2025 c 421: "This act does not affect any existing right acquired or liability or obligation incurred under the sections amended or repealed in this act or under any rule or order adopted under those sections, nor does it affect any proceeding instituted under those sections." [ 2025 c 421 s 303.]
Effective date—2025 c 421: "This act is necessary for the support of the state government and its existing public institutions, and takes effect immediately [May 20, 2025]." [ 2025 c 421 s 305.]
Contingency—2021 c 196 ss 5 and 16: "(1) If a court of competent jurisdiction, in a final judgment not subject to appeal, adjudges section 5 of this act unconstitutional, or otherwise invalid, in its entirety, section 16 of this act is null and void in its entirety. Any credits previously claimed under section 16 of this act must be repaid within 30 days of the department of revenue's notice to the taxpayer of the amount due.
(2) If the taxpayer fails to repay the credit by the due date, interest and penalties as provided in chapter 82.32 RCW apply to the deficiency." [ 2021 c 196 s 20.]
Automatic expiration date and tax preference performance statement exemption—2021 c 196: See note following RCW 82.87.010.

catchline: Tax imposed—Long-term capital assets.


title: RCW 82.87.050

text:
This chapter does not apply to the sale or exchange of:
(1) All real estate transferred by deed, real estate contract, judgment, or other lawful instruments that transfer title to real property and are filed as a public record with the counties where real property is located;
(2)(a) An interest in a privately held entity only to the extent that any long-term capital gain or loss from such sale or exchange is directly attributable to the real estate owned directly by such entity.
(b)(i) Except as provided in (b)(ii) and (iii) of this subsection, the value of the exemption under this subsection is equal to the fair market value of the real estate owned directly by the entity less its basis, at the time that the sale or exchange of the individual's interest occurs, multiplied by the percentage of the ownership interest in the entity which is sold or exchanged by the individual.
(ii) If a sale or exchange of an interest in an entity results in an amount directly attributable to real property and that is considered as an amount realized from the sale or exchange of property other than a capital asset under Title 26 U.S.C. Sec. 751 of the internal revenue code, such amount must not be considered in the calculation of an individual's exemption amount under (b)(i) of this subsection (2).
(iii) Real estate not owned directly by the entity in which an individual is selling or exchanging the individual's interest must not be considered in the calculation of an individual's exemption amount under (b)(i) of this subsection (2).
(c) Fair market value of real estate may be established by a fair market appraisal of the real estate or an allocation of assets by the seller and the buyer made under Title 26 U.S.C. Sec. 1060 of the internal revenue code, as amended. However, the department is not bound by the parties' agreement as to the allocation of assets, allocation of consideration, or fair market value, if such allocations or fair market value do not reflect the fair market value of the real estate. The assessed value of the real estate for property tax purposes may be used to determine the fair market value of the real estate, if the assessed value is current as of the date of the sale or exchange of the ownership interest in the entity owning the real estate and the department determines that this method is reasonable under the circumstances.
(d) The value of the exemption under this subsection (2) may not exceed the individual's long-term capital gain or loss from the sale or exchange of an interest in an entity for which the individual is claiming this exemption;
(3) Assets held under a retirement savings account under Title 26 U.S.C. Sec. 401(k) of the internal revenue code, a tax-sheltered annuity or custodial account described in Title 26 U.S.C. Sec. 403(b) of the internal revenue code, a deferred compensation plan under Title 26 U.S.C. Sec. 457(b) of the internal revenue code, an individual retirement account or individual retirement annuity described in Title 26 U.S.C. Sec. 408 of the internal revenue code, a Roth individual retirement account described in Title 26 U.S.C. Sec. 408A of the internal revenue code, an employee defined contribution program, an employee defined benefit plan, or a similar retirement savings vehicle, whether foreign or domestic, that penalizes withdrawals until the legal or beneficial owner reaches a certain age;
(4) Assets pursuant to, or under imminent threat of, condemnation proceedings by the United States, the state or any of its political subdivisions, or a municipal corporation;
(5) Cattle, horses, or breeding livestock if for the taxable year of the sale or exchange, more than 50 percent of the taxpayer's gross income for the taxable year, including from the sale or exchange of capital assets, is from farming or ranching;
(6) Property depreciable under Title 26 U.S.C. Sec. 167(a)(1) of the internal revenue code, or that qualifies for expensing under Title 26 U.S.C. Sec. 179 of the internal revenue code;
(7) Timber, timberland, or the receipt of Washington capital gains as dividends and distributions from real estate investment trusts derived from gains from the sale or exchange of timber and timberland. "Timber" means forest trees, standing or down, on privately or publicly owned land, and includes Christmas trees and short-rotation hardwoods. The sale or exchange of timber includes the cutting or disposal of timber qualifying for capital gains treatment under Title 26 U.S.C. Sec. 631(a) or (b) of the internal revenue code;
(8)(a) Commercial fishing privileges.
(b) For the purposes of this subsection (8), "commercial fishing privilege" means a right, held by a seafood harvester or processor, to participate in a limited access fishery. "Commercial fishing privilege" includes and is limited to:
(i) In the case of federally managed fisheries, quota and access to fisheries assigned pursuant to individual fishing quota programs, limited entry and catch share programs, cooperative fishing management agreements, or similar arrangements; and
(ii) In the case of state-managed fisheries, quota and access to fisheries assigned under fishery permits, limited entry and catch share programs, or similar arrangements; and
(9) Goodwill received from the sale of an auto dealership licensed under chapter 46.70 RCW whose activities are subject to chapter 46.96 RCW.
[ 2025 c 409 s 5; 2021 c 196 s 6.]
Notes:
Automatic expiration date and tax preference performance statement exemption—2021 c 196: See note following RCW 82.87.010.

catchline: Exemptions.


title: RCW 82.87.060

text:
In computing tax for a taxable year, a taxpayer may deduct from his or her Washington capital gains:
(1) A standard deduction of $250,000 per individual, or in the case of spouses or domestic partners, their combined standard deduction is limited to $250,000, regardless of whether they file joint or separate returns. The amount of the standard deduction shall be adjusted pursuant to RCW 82.87.150;
(2) Amounts that the state is prohibited from taxing under the Constitution of this state or the Constitution or laws of the United States;
(3) The amount of adjusted capital gain derived from the sale or transfer of the taxpayer's interest in a qualified family-owned small business pursuant to RCW 82.87.070; and
(4) Charitable donations deductible under RCW 82.87.080.
[ 2021 c 196 s 7.]
Notes:
Automatic expiration date and tax preference performance statement exemption—2021 c 196: See note following RCW 82.87.010.

catchline: Deductions.


title: RCW 82.87.070

text:
(1) In computing tax under this chapter for a taxable year, a taxpayer may deduct from his or her Washington capital gains the amount of adjusted capital gain derived in the taxable year from the sale of substantially all of the fair market value of the assets of, or the transfer of substantially all of the taxpayer's interest in, a qualified family-owned small business, to the extent that such adjusted capital gain would otherwise be included in the taxpayer's Washington capital gains.
(2) For purposes of this section, the following definitions apply:
(a) "Assets" means real property and personal property, including tangible personal property and intangible property.
(b) "Family" means the same as "member of the family" in RCW 83.100.046.
(c)(i) "Materially participated" means an individual was involved in the operation of a business on a basis that is regular, continuous, and substantial.
(ii) The term "materially participated" must be interpreted consistently with the applicable treasury regulations for Title 26 U.S.C. Sec. 469 of the internal revenue code, to the extent that such interpretation does not conflict with any provision of this section.
(d) "Qualified family-owned small business" means a business:
(i) In which the taxpayer held a qualifying interest for at least five years immediately preceding the sale or transfer described in subsection (1) of this section. For the purposes of this subsection (2)(d)(i), the calculation of an individual's holding period for a qualifying interest is not reset in the event that a business either changes only its entity type or makes a nonmaterial change, or both;
(ii) In which either the taxpayer or members of the taxpayer's family, or both, materially participated in operating the business for at least five of the 10 years immediately preceding the sale or transfer described in subsection (1) of this section, unless such sale or transfer was to a qualified heir; and
(iii) That had worldwide gross revenue of $10,000,000 or less in the 12-month period immediately preceding the sale or transfer described in subsection (1) of this section. The worldwide gross revenue amount under this subsection (2)(d)(iii) shall be adjusted annually as provided in RCW 82.87.150.
(e) "Qualified heir" means a member of the taxpayer's family.
(f) "Qualifying interest" means:
(i) An interest as a proprietor in a business carried on as a sole proprietorship; or
(ii) An interest in a business if at least:
(A) Fifty percent of the business is owned, directly or indirectly, by any combination of the taxpayer or members of the taxpayer's family, or both;
(B) Thirty percent of the business is owned, directly or indirectly, by any combination of the taxpayer or members of the taxpayer's family, or both, and at least:
(I) Seventy percent of the business is owned, directly or indirectly, by members of two families; or
(II) Ninety percent of the business is owned, directly or indirectly, by members of three families.
(g) "Substantially all" means at least 90 percent.
[ 2025 c 409 s 6; 2021 c 196 s 8.]
Notes:
Automatic expiration date and tax preference performance statement exemption—2021 c 196: See note following RCW 82.87.010.

catchline: Qualified family-owned small business deduction.


title: RCW 82.87.080

text:
(1) In computing tax under this chapter for a taxable year, a taxpayer may deduct from the person's Washington capital gains the amount donated by the taxpayer to one or more qualified organizations during the same taxable year in excess of the minimum qualifying charitable donation amount. For the purposes of this section, the minimum qualifying charitable donation amount equals $250,000. The minimum qualifying charitable donation amount under this subsection (1) shall be adjusted pursuant to RCW 82.87.150.
(2) The deduction authorized under subsection (1) of this section may not exceed $100,000 for the taxable year. The maximum amount of the available deduction under this subsection (2) shall be adjusted pursuant to RCW 82.87.150.
(3) The deduction authorized under subsection (1) of this section may not be carried forward or backward to another tax reporting period.
(4) For the purposes of this section, the following definitions apply:
(a) "Nonprofit organization" means an organization exempt from tax under Title 26 U.S.C. Sec. 501(c)(3) of the internal revenue code.
(b) "Principally directed and managed" means the place where a qualified organization's activities are primarily directed, controlled, and coordinated.
(c) "Qualified organization" means a nonprofit organization, or any other organization, that is:
(i) Eligible to receive a charitable contribution as defined in Title 26 U.S.C. Sec. 170(c) of the internal revenue code; and
(ii) Principally directed and managed within the state of Washington.
[ 2025 c 409 s 7; 2021 c 196 s 9.]
Notes:
Automatic expiration date and tax preference performance statement exemption—2021 c 196: See note following RCW 82.87.010.

catchline: Charitable donation deduction.


title: RCW 82.87.090

text:
The tax imposed under this chapter is in addition to any other taxes imposed by the state or any of its political subdivisions, or a municipal corporation, with respect to the same sale or exchange, including the taxes imposed in, or under the authority of, chapter 82.04, 82.08, 82.12, 82.14, 82.45, or 82.46 RCW.
[ 2021 c 196 s 10.]
Notes:
Automatic expiration date and tax preference performance statement exemption—2021 c 196: See note following RCW 82.87.010.

catchline: Other taxes.


title: RCW 82.87.100

text:
(1) For purposes of the tax imposed under this chapter, long-term capital gains and losses are allocated to Washington as follows:
(a) Long-term capital gains or losses from the sale or exchange of tangible personal property are allocated to this state if the property was located in this state at the time of the sale or exchange. Long-term capital gains or losses from the sale or exchange of tangible personal property are also allocated to this state even though the property was not located in this state at the time of the sale or exchange if:
(i) The property was located in the state at any time during the taxable year in which the sale or exchange occurred or the immediately preceding taxable year;
(ii) The taxpayer was a resident at the time the sale or exchange occurred; and
(iii) The taxpayer is not subject to the payment of an income or excise tax legally imposed on the long-term capital gains or losses by another taxing jurisdiction.
(b) Long-term capital gains or losses derived from intangible personal property are allocated to this state if the taxpayer was domiciled in this state at the time the sale or exchange occurred.
(2)(a) A credit is allowed against the tax imposed in RCW 82.87.040 for legally imposed income or excise tax paid by the taxpayer to another taxing jurisdiction on capital gains derived from capital assets within the other taxing jurisdiction to the extent such capital gains are included in the taxpayer's Washington capital gains. The amount of credit under this subsection is the lesser of: (i) The total amount of tax due under this chapter derived from such capital assets; or (ii) the total amount of tax paid to the other taxing jurisdiction on the capital gains derived from such capital assets. The credit under this subsection (2) is nonrefundable, and there is no carryback or carryforward of any unused credits.
(b) As used in this section, "taxing jurisdiction" means a state of the United States other than the state of Washington, the District of Columbia, the Commonwealth of Puerto Rico, any territory or possession of the United States, or any foreign country or political subdivision of a foreign country.
[ 2025 c 409 s 8; 2021 c 196 s 11.]
Notes:
Effective date—2025 c 409 ss 3, 4, 8, 10, and 15: See note following RCW 82.87.160.
Automatic expiration date and tax preference performance statement exemption—2021 c 196: See note following RCW 82.87.010.

catchline: Allocation of long-term capital gains and losses—Credit.