Official Text and Analysis.

Replaces a workforce education investment surcharge with an increase in the general service business and occupation tax rate from 1.5 percent to 1.8 percent for businesses with gross income in excess of $1 million.

Exempts health care providers with at least 25 percent of revenue from Medicaid payments from the additional B&O tax.

Exempts oncologists and cancer care entities from the additional B&O tax.

Requires a reduction in the additional B&O tax rate that reflects revenue growth between the November 2019 and November 2020 revenue forecast. Requires the state treasurer on a biennial basis to transfer from the general fund to the workforce education investment account an amount equal to any 2021-2023 biennial reduction in revenues from any rate reduction. Grows transfers by the fiscal growth factor.

Adds the workforce education investment account to the definition of related funds in the state four-year balanced budget requirement.

Expires the tax rate increases on January 1, 2025, if the Joint Legislative Audit and Review Committee makes a determination that Washington's excise tax structure is more regressive due to the tax rate increases in the legislation.

Exempts mental health providers from the additional B&O tax.

Exempts commercial hauling services from the additional B&O tax.

Exempts hearing health care professionals from the additional B&O tax.

Exempts ophthalmology services from the additional B&O tax.

Exempts any business owned by a veteran from the additional B&O tax.

Exempts nursing and residential care facilities from theadditional B&O tax.

Exempts health care providers with at least 75 percent of revenue from Medicaid payments from the additional B&O tax.

Exempts health care services from the additional B&O tax.

Exempts substance use disorder treatment providers from the additional B&O tax.

Lowers the tax rate from 1.8 percent to 1.75 percent. Removes the sections of the draft increasing the small business credit and filing threshold. Clarifies that the advanced computing surcharge does not apply to financial institutions.

Makes the repeal of the surcharges retroactive to January 1, 2020.

Makes technical changes to language exempting financial institutions from the advanced computing surcharge.

Exempts optometrists from the additional B&O tax.

Exempts dental services from the additional B&O tax.

Exempts revenues from Medicaid patients from the additional business and occupation tax.

Exempts forestry and logging services from the additional B&O tax.

Exempts the retailing of prescription and nonprescription drugs and medicines from the additional B&O tax.

Exempts physician's offices, outpatient care centers, medical and diagnostic laboratories, dentist's offices, offices of other health practitioners, and other ambulatory health care services from the additional B&O tax if those business activities are conducted in a rural underserved area.

Exempts veterinary services from the additional B&O tax..

Exempts businesses engaged in providing infrastructure for hosting or data processing services from the additional B&O tax.

Exempts providers that give counseling and treatment to domestic violence victims from the additional B&O tax.

Exempts architectural, engineering, and related services from the additional B&O tax.

Exempts motor vehicle and parts dealers from the additional B&O tax.

Expires the tax rate increases on January 1, 2025, if the Joint Legislative Audit and Review Committee makes a determination that Washington's excise tax structure is more regressive due to the tax rate increases in the legislation.

Exempts physician's offices, outpatient care centers, medical and diagnostic laboratories, dentist's offices, offices of other health practitioners, and other ambulatory health care services from the 1.75 percent B&O tax if those business activities are conducted in a rural underserved area.

Exempts businesses engaged in providing infrastructure for hosting or data processing services from the 1.75 percent B&O tax.

Exempts health care services from the 1.75 percent B&O tax.

Exempts dental services from the 1.75 percent B&O tax.

Exempts optometrists from the 1.75 percent business and occupation tax rate.

Exempts nursing and residential care facilities from the 1.75 percent B&O tax.

Exempts waste management and remediation services from the 1.75 percent B&O tax.

Removes the 1.75 percent business and occupation tax on services. (2) Imposes the greater of a 2.5 percent advanced computing surcharge on the gross income of a person or $300 million per year. Persons subject to this new surcharge are businesses for whom all of the following apply: (a) They have been registered with the Department of Revenue to do business in Washington for at least 37 years; (b) their combined employment in this state exceeds 40,000 full-time and part-time employees; and (c) their business activities are primarily the development, sales, and licensing of computer software and services.

Exempts substance use disorder treatment providers from the 1.75 percent B&O tax.

Exempts any business owned by a veteran from the 1.75 percent B&O tax.

Authorizes a credit against the 1.75 percent business and occupation tax rate or the advanced computing surcharge if the taxpayer makes a contribution to a student to pursue higher education.

Exempts veterinary services from the 1.75 percent B&O tax.

Exempts commercial hauling services from the 1.75 percent B&O tax.

Exempts mental health providers from the 1.75 percent B&O tax.

Exempts the retailing of prescription and nonprescription drugs and medicines from the 1.75 percent B&O tax.

Exempts ophthalmology services from the 1.75 percent B&O tax.

Exempts hearing health care professionals from the 1.75 percent B&O tax.

Exempts oncologists and cancer care entities from the 1.75 percent B&O tax.

Exempts lawyers who perform more than 10 percent pro bono hours from the 1.75 percent business and occupation tax rate.

Exempts providers that give counseling and treatment to domestic violence victims from the 1.75 percent B&O tax.

Exempts forestry and logging services from the 1.75 percent B&O tax.

Repeals the Workforce Education Investment Act surcharges retroactively to January 1, 2020.

Provides health care providers an exemption from the new 1.75 percent business and occupation tax rate until the state fully funds Medicaid reimbursement rates.

Exempts revenues from Medicaid patients from the 1.75 percent business and occupation tax.

Reduces the current Workforce Education Investment surcharge to 16.7 percent. Delays implementation of the provisions containing the new business and occupation service rate of 1.75 percent and the new advanced computing surcharge of 1.22 percent until January 1, 2021.

Strikes the service activities business and occupation tax rate increase to 1.75 percent. Increases the advanced computing surcharge to 1.5 percent. Imposes the advanced computing surcharge on gross income from royalties in addition to service activities.

Exempts motor vehicle and parts dealers from the 1.75 percent B&O tax.

Requires a reduction in the additional B&O tax rate that reflects revenue growth between the November 2019 and November 2020 revenue forecast. Requires the state treasurer on a biennial basis to transfer from the general fund to the workforce education investment account an amount equal to any 2021-2023 biennial reduction in revenues from any rate reduction. Grows transfers by the fiscal growth factor.

Exempts architectural, engineering, and related services from the 1.75 percent B&O tax.

Exempts health care providers with at least 75 percent of revenue from Medicaid payments from the 1.75 percent B&O tax.

Exempts businesses with at least 51% of revenue from payments from Medicaid from paying the 1.75% B&O rate.

Exempts architectural, engineering, and related services from paying the 1.75% B&O rate if the business worked on at least two affordable housing projects during the year.