2025 Legislation of Note
TAX & FISCAL POLICY
Max Martin, AWB’s tax and fiscal policy director, continues to engage on many tax proposals, including:
- B&O tax increases: House Bill 2081 would increase the B&O tax rate for manufacturing, retailing, and wholesaling to 0.5% in January 2027, while making changes to other rate categories, impacting hundreds of thousands of businesses. It would also impose a temporary B&O tax surcharge on businesses with taxable income over $250 million, and raise the B&O surcharge for financial institutions. AWB testified in opposition last week and sent a letter to legislators Monday. The bill passed out of the House Finance Committee Saturday with floor debate expected today.
- Sales tax on services: Senate Bill 5814 would expand the sales tax to a range of services, including advertising, IT services, temporary staffing agencies and security, impacting an estimated 35,000 firms. The bill would also require a one-time prepayment of sales taxes for businesses with at least $3 million in taxable retail sales. AWB testified opposed last week. The Senate voted 27-22 Saturday to approve the bill and sent it to the House for consideration.
- Capital gains tax and estate tax: Senate Bill 5813 would increase the state's capital gains tax and estate tax. The existing 7% capital gains tax applies to gains above $270,000 on the sale or exchange of long-term assets including stocks, bonds and business interests. The proposal would add another 2.9% for gains exceeding $1 million. The Senate voted 27-21 Saturday to approve the bill and sent it to the House for consideration.
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EMPLOYMENT LAW
Lindsey Hueer, AWB’s lead on employment law issues, has updates on these bills:
- UI for striking workers: Senate Bill 5041, which would allow striking workers to collect unemployment insurance benefits, has passed both chambers. The bill is now back in the Senate to concur on the changes made in the House. The version that passed the House last week imposes a four-week limit on receiving benefits, while the Senate version has a 12-week limit. AWB will continue to oppose this bill in the final week of the legislative session.
- Personnel records: House Bill 1308 has passed both chambers and is heading to the governor’s desk. This bill requires employers to provide a copy of an employee's personnel file to the employee or former employee within 21 days of the request, or face a potential private right of action lawsuit. The bill was amended prior to final passage to remove a problematic, broad provision regarding the required contents of a personnel record. The bill is still concerning due to the new private right of action, but the amended version provides increased clarity.
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ENVIRONMENT
Peter Godlewski, AWB government affairs director for energy and the environment, has an update on the following bill:
- Extended producer responsibility: Senate Bill 5284 narrowly passed the House by a vote of 51-45 last Monday. It now heads back to the Senate for concurrence. The bill would create complicated new regulations called "extended producer responsibility" or EPR that will drive up prices of everyday goods. Thank you to all the AWB members who responded to our Action Alert to oppose this bill last week.
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Emily Wittman, AWB’s lead on workforce, education and health care, has an update on the following bill:
Pay transparency updates: AWB is pleased to see Senate Bill 5408, which makes key updates to Washington’s pay transparency law, pass with broad bipartisan support. The bill aims to address a flurry of lawsuits filed in response to Washington’s pay transparency law. Under the bill, employers would have 14 days to correct a job posting after they are notified it does not include a salary range. AWB worked closely with lawmakers on this important fix, which will preserve both pay transparency and protect employers from frivolous lawsuits. The bill that passed the House includes three favorable amendments supported by the business community.