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2023 Tax Legislation

Below are summaries of tax-related bills passed by the legislature and signed into law by Gov. Inslee during the 2023 legislative session.
 

Also, see the department’s complete Summary of 2023 Tax & Licensing Legislation.
 

Aircraft maintenance facilities sales/use tax exemption

This bill changes the definition of eligible maintenance repair operator and extends the expiration date of the exemption to January 31, 2031.

Effective July 23, 2023 (SHB 1318, Chapter 414, Laws of 2023) 

Sales and use tax exemption for construction of new airplane repair stations modified
 

Alternative jet fuel

This bill creates the following:

  • Preferential B&O tax rates for manufacturing, processing for hire, and sales of alternative jet fuel.
  • B&O tax credit for sales of alternative jet fuel.
  • B&O tax credit for purchase/use of alternative jet fuel.
  • PUT credit for purchase/use of alternative jet fuel.

Effective July 1, 2024 (ESSB 5447, Chapter 232, Laws of 2023)
 

Asphalt and aggregate valuation

This bill provides a new valuation method for asphalt or aggregate installed in a public road construction project by the extractor or manufacturer.

Effective August 1, 2023 (SHB 1764, Chapter 307, Laws of 2023)

Valuing asphalt and aggregates used in public road construction
 

Battery stewardship B&O tax exemption

This bill creates a B&O tax exemption for amounts received by a battery stewardship organization from battery producers. The battery stewardship program will be administered by the Washington State Department of Ecology.

Effective January 1, 2027 (ESSSB 5144, Chapter 434, Laws of 2023)
 

Contests of chance ($50,000 per year or more) and parimutuel wagering B&O tax rate increases

This bill increases the B&O tax rates for the following businesses activities:

  • Gambling contests of chance ($50,000 per year or more).
  • Parimutuel wagering.

Effective July 1, 2023 (ESSSB 5634, Chapter 284, Laws of 2023)

Business and occupation (B&O) tax rate increase for Contests of Chance ($50,000 or more a year) and Parimutuel Wagering
 

Cooperative finance organization B&O tax deduction

This bill creates a B&O tax deduction for amounts received by cooperative finance organizations from loans to rural electric cooperatives or other nonprofit or governmental utility service providers.

Effective July 1, 2023 (SB 5166, Chapter 317, Laws of 2023)
 

Employee ownership B&O tax credit

This bill creates a B&O tax credit for the costs of converting a qualifying business to an employee-owned business.

Effective July 1, 2024 (SSB 5096, Chapter 392, Laws of 2023)

Employee ownership program B&O tax credit

Food manufacturers B&O tax preferences

This bill extends the B&O tax exemptions and preferential tax rates for manufacturers of dairy products, seafood products, and fresh fruits and vegetables.

(HB 1573, Chapter 422, Laws of 2023)
 

Hog fuel sales/use tax exemption

This bill extends the sales/use tax exemption for hog fuel used to produce electricity, steam, heat, or biofuel.

Effective July 23, 2023 (HB 1018, Chapter 341, Laws of 2023)

Sale/use tax exemption on purchases of hog fuel extended – updated requirements effective July 23, 2023
 

LET exemption for arenas

This bill creates a leasehold excise tax exemption for certain arenas.

Effective October 1, 2023 (SHB 1163, Chapter 343, Laws of 2023)
 

Medicaid B&O tax deduction

This bill creates a B&O tax deduction for amounts received by certain healthcare organizations for the Medicaid transformation project.

Effective July 23, 2023 (EHB 1812, Chapter 313, Laws of 2023)

Medicaid incentive payments business and occupation (B&O) tax deductions extended to Medicaid transformation funding
 

Mobility enhancing equipment sales/use tax exemption

This bill creates a sales/use tax exemption for mobility enhancing equipment for complex needs patients.

Effective August 1, 2023 (SSB 5218, Chapter 319, Laws of 2023)

Sales and use tax exemption for purchases of mobility enhancing equipment
 

Motion picture competitiveness program contributors B&O tax credit

This bill removes the annual tax performance report requirement for persons that both contribute to and receive funding from the motion picture competitiveness program.

Effective July 23, 2023 (SSB 5565, Chapter 374, Laws of 2023)

Motion picture competitiveness program

Newspaper publishers B&O tax exemption

This bill creates a B&O tax exemption for publishers of newspapers and eligible digital content.

Effective January 1, 2024 (ESSSB 5199, Chapter 286, Laws of 2023)

Newspaper publishers B&O tax exemption

Petroleum products tax

This bill increases the petroleum products tax rate and the thresholds for applying and suspending the tax.

Effective date October 1, 2023 (ESHB 1175, Chapter 170, Laws of 2023)

Petroleum products tax

Renewable energy systems

This bill creates the following:

  • An excise tax on the use of renewable energy generating systems as an electric power source.
  • An excise tax on the storage capacity of the renewable energy generating system.
  • A personal property tax exemption for personal property used exclusively for the generation or storage of renewable energy.

 (SHB 1756, Chapter 427, Laws of 2023)

Renewable energy generation and storage facilities

Senior living meals

This bill provides a sales/use tax exemption for meals furnished to independent living tenants of senior living communities as part of their rental agreement.

Effective July 23, 2023 (SHB 1431, Chapter 416, Laws of 2023

Senior living communities – tenant meals – sales and use tax exemption