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Employee ownership program B&O tax credit repealed

Intended audience: Businesses converting to an employee ownership structure or claiming the credit.

House Bill 2047 repeals the employee ownership program effective July 1, 2026. This credit was originally set to expire on July 1, 2030.

Credits cannot be earned after June 30, 2025, and cannot be claimed for filing periods starting on or after July 1, 2026.

Questions?

For questions about the credit, please call our Taxpayer Account Administration division at 360-705-6214.

New tiered rates for Washington’s capital gains tax

Intended audience: Individuals subject to Washington’s capital gains tax

Beginning with tax year 2025, Washington’s long-term capital gains tax has a tiered rate.

What are the rates?

Your first $1 million in taxable Washington capital gains is subject to tax at a rate of 7%. Any amount of Washington capital gains exceeding $1 million is subject to a 7% tax, plus an additional 2.9% tax.

Reusable bag fees

According to Department of Ecology regulations, retail establishments may only provide reusable film plastic carryout bags or recycled content paper carryout bags to a customer at the point of sale. Retailers may also sell durable reusable bags made of materials other than film plastic.

Charges for carry out bags

Retail establishments must charge customers for every carryout bag they provide or sell that is:

Youth camps

Day camps

Day camps offer youth a variety of supervised indoor and outdoor activities within a safe environment. Depending on the organization, these camps can be provided by the day, week, or month.

Generally, charges for day camps are subject to business and occupation (B&O) tax under the Service and Other Activities classification, and you do not have to collect sales tax. This includes day camps offered by nonprofit organizations or state or local government entities, as well as camps focused on individuals with disabilities or mental illness.

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