ENGROSSED SUBSTITUTE SENATE BILL 5814
State of Washington
69th Legislature
2025 Regular Session
By Senate Ways & Means (originally sponsored by Senators Frame, Trudeau, Alvarado, Nobles, Pedersen, Valdez, and C. Wilson)
READ FIRST TIME 04/19/25.
AN ACT Relating to funding public schools, health care, social services, and other programs and services to benefit Washingtonians by modifying the application and administration of certain excise taxes; amending RCW 82.04.192 , 82.26.010 , and 82.32.045 ; reenacting and amending RCW 82.04.050 and 82.32.050 ; adding a new section to chapter 82.24 RCW; creating new sections; and providing effective dates.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:
NEW SECTION. Sec. 1. The legislature finds that, through the state's general fund, the state funds public schools, health care, and social services that help Washingtonians to succeed and thrive. These revenues help the state meet its paramount duty to amply provide every child in the state with an education, including children who qualify for special education services, creating the opportunity for each child to succeed in school and achieve success in life. Revenues generated by this act will support health care and other programs that protect the safety and well-being of the public, including behavioral health services for those living with mental illness or substance use disorder, as well as supervision of individuals who have committed crimes. These revenues will also fund social services that provide critical, basic needs assistance for our state's most vulnerable residents, including support for those with developmental disabilities and long-term care for the elderly.
Furthermore, the legislature finds that the state's tax code must be periodically reviewed and updated to ensure that tax policy reflects our modern economy. The legislature recognizes that our state and nation have moved away from a predominantly goods-based economy towards a more service-based economy. As a result, Washington's tax code, which is heavily reliant on sales taxes, continues to reach a narrowing share of economic activity subject to the retail sales tax. Similar to the marketplace fairness act of 2017, which extended retail sales tax to remote retailers with no physical presence in the state to ensure the tax code reflected the growing shift of retail sales toward online sales and away from brick-and-mortar stores located in the state, so too must this legislature consider extending the retail sales tax to computer-related services, as well as remove exemptions to the retail sales tax for digital automated services which have not been updated since 2009, and other services to which it is more appropriate to apply retail sales tax in the state's current economy. The legislature further recognizes that taxes on tobacco products, which have largely gone unchanged over the last several decades, do not adequately capture new and emerging nicotine products. As certain new products come onto the market, they are exempt from excise tax, creating an unfair advantage in the market against their competitors.