H-0327.1
HOUSE BILL 1284
State of Washington
69th Legislature
2025 Regular Session
By Representatives Pollet, Berry, Doglio, Ryu, Mena, Reed, Scott, Alvarado, Kloba, Farivar, Macri, and Hill
Read first time 01/14/25. Referred to Committee on Finance.
AN ACT Relating to eliminating the investment income business and occupation tax deduction for corporations and other business entities; amending RCW 82.04.4281 ; creating a new section; and providing an effective date.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:
NEW SECTION. Sec. 1. The legislature finds that Washington law provides a business and occupation tax deduction for investment income for corporations and other business entities. The legislature further finds that this deduction costs the state hundreds of millions of dollars over a biennium. The legislature further finds that the practical effect of this deduction is to discourage investment in the state because Washington companies that invest money and create jobs in Washington pay business and occupation taxes on revenues generated from their reinvestment, while Washington companies that invest money in out-of-state markets do not pay tax on revenues generated from these investments. The legislature further finds that increasing fairness in the state tax system by closing tax loopholes is essential to encouraging productive economic investment in the state. The legislature further finds that the lost revenue from this deduction is an expenditure that conflicts with, and harms, the state's constitutional obligation to significantly increase funding for our public schools and our children's education. The legislature further finds that tax loopholes that incentivize companies to invest money out-of-state instead of reinvesting in Washington, create an inequitable tax burden on those companies that reinvest revenues into Washington. Therefore, it is the intent of the legislature to bring equity to the state tax system by closing a loophole that benefits companies that generate revenue from investments made outside of the state and to ensure they pay their fair share towards our paramount duty of providing education to every child in Washington, investing in building the education needed for the workforce that these businesses require to thrive, and for the services and infrastructure the state provides.
Sec. 2. RCW 82.04.4281 and 2007 c 54 s 9 are each amended to read as follows: