The following bills were passed by the Washington State Legislature in 2025 and will impact Washington’s business community. The laws go into effect on or before July 27.
Business & Individual Tax Increases
Raises business taxes significantly, especially for large and high-revenue companies.
Introduces significant changes to Washington state’s Business and Occupation (B&O) tax structure, impacting employers across various sectors. Beginning on Oct. 1, 2025, the bill includes a broad-based B&O increase to 0.5% for business activities including retailing, insurance, research and development, tooling manufacturing, and more. See bill report linked above for fill list. The bill also increases the B&O rate for services and other activities for businesses with a gross income of over $5 million to 2.1%. Starting Jan. 1, 2026, an additional B&O tax will be imposed on businesses with at least $250 million in Washington taxable income. The additional tax will be equal to 0.5% of the business’ taxable income over $250 million (in addition to the other B&O taxes). This surcharge will expire on Dec. 31, 2029. Beginning Oct. 1, 2025, the additional B&O on certain financial institutions will be increased to 1.5%. The bill also includes an advanced computing surcharge to 7.5% and increases the annual cap to $75 million beginning Jan. 1, 2026.
SB 5814: Modifying certain excise taxes
Applies sales tax to more service industries and redefines what counts as a...
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