Budget & Taxes (Business Taxes)

HB 2045 creates a new 1% tax on businesses with over $250 million in annual revenue in Washington starting January 2026, targeting large corporations. It also increases the tax rate for financial institutions from 1.2% to 1.9% after July 2025. The bill exempts manufacturers, farmers, and certain income types from the new tax. These changes aim to fund K-12 education, public safety, health care, and basic needs programs, as stated in the legislative findings.

This bill amends Washington State's business tax code, establishing new tax rates for various sectors: 0.275% for international investment management, 1.8% for most business activities (with a reduced 1.5% rate for small businesses and hospitals), and 0.9% for aerospace product development. It requires 16.67% of revenue from the 1.8% tax rate to be deposited into a workforce education investment account (RCW 43.79.195), which funds job training and workforce development programs. The bill does not increase funding for higher education; instead, it redirects business tax revenue to workforce education initiatives. It takes effect October 1, 2025.