SHB 2084
In CommitteeHouse
Tax preferences
Increasing funding for K-12, health care, and public safety by repealing or modifying tax preferences for certain industries and goods.
This status may be delayed. See Action History below for the latest updates.
How does a bill become law?
- Introduced: The bill is filed and assigned a number.
- Committee: A subject-matter committee holds hearings, takes public testimony, and decides whether to advance the bill.
- Floor Vote: The full chamber (House or Senate) debates and votes on the bill.
- Opposite Chamber: The bill repeats the committee and floor vote process in the other chamber.
- Governor: The Governor reviews the bill and decides whether to sign or veto it.
- Signed: The bill has been signed into law.
AI Analysis
This bill increases state revenue by eliminating tax exemptions for gold bullion, raising taxes on prescription drug wholesalers, and adjusting B&O tax rates for self-storage and multi-state businesses. It also updates how businesses operating in Washington and other states calculate their taxable income here.
- Repeals the exemption for gold bullion and monetized bullion from the business and occupation (B&O) tax, effective October 1, 2025.
- Imposes a new B&O tax on self-storage space rentals: 1.75% for most operators, or 1.5% for small businesses with gross income under $1,000,000 (with strict rules to prevent misuse of affiliate status).
- Clarifies that long-term storage space rentals (30+ days) are taxable under B&O, even though real estate sales are exempt, and updates definitions for apportioning income across states for financial and telecom businesses.
- Raises the B&O tax rate on warehousing and reselling prescription drugs from 0.138% to 0.484%, effective October 1, 2025.
- Amends income apportionment rules for multi-state businesses to use a single-factor (receipts-only) method for financial institutions and updates definitions for apportionable income and out-of-state taxation.
Who is affected
- Self-storage facility operators — Self-storage facility operators with annual gross income under $1,000,000 (or affiliated groups under $1,000,000) will pay a lower tax rate of 1.5% instead of the standard 1.75%; larger operators or those failing to verify non-affiliation may lose the lower rate.
- Real estate developers and brokers — Businesses that sell real estate (including long-term storage space rentals) will no longer be subject to the business and occupation (B&O) tax on those transactions, but commissions and similar fees remain taxable.
- Financial institutions and telecom providers — Financial institutions and telecommunications companies may see changes in how their multi-state income is taxed, as the state adopts a single-factor (receipts-only) apportionment method and updates definitions of apportionable income.
- Pharmaceutical wholesalers and retailers — Pharmacies, wholesalers, and retailers that warehouse and resell prescription drugs will pay a higher B&O tax rate (from 0.138% to 0.484%), increasing their tax burden on those activities.
Pro/Con Analysis
Potential Benefits (5)
The revenue generated—primarily from high-wealth entities (gold traders, large drug wholesalers, large self-storage chains)—will fund K-12, health care, and public safety, directly benefiting everyday Washingtonians who depend on those services, especially in underserved communities.
Public SafetyPeopleRef: Fiscal Impact summary and Sec. 402 (‘necessary for support of state government’)The tiered rate structure and affiliate restrictions are designed to protect small, locally owned self-storage operators from being disadvantaged by larger chains—though enforcement complexity may limit real-world impact, the intent and structure favor small-scale operators over concentrated corporate interests.
Business & EmploymentPeopleRef: Sec. 201 (1.5% rate for self-storage businesses with <$1M gross income, with affiliate caps)While the tax may increase drug costs, the revenue raised can support prescription drug affordability programs and public health initiatives—especially since the tax targets intermediaries (not manufacturers or pharmacies), and the bill explicitly ties revenue to health care funding.
HealthcarePeopleRef: Sec. 301 (prescription drug wholesaler tax increase)Standardizing apportionment rules for financial and telecom businesses improves fairness and reduces gaming of the tax system, benefiting small- and mid-sized businesses that lack resources to navigate complex multi-state tax allocations.
Business & EmploymentLean peopleRef: Sec. 203 & 204 (apportionment updates for multi-state businesses)Clarifying that long-term storage rentals are taxable B&O activities prevents unintended revenue leakage and ensures local governments receive consistent tax revenue from commercial real estate-adjacent activities—though the impact is modest and indirect.
Local GovernmentLean peopleRef: Sec. 202 (exclusion of long-term self-storage rentals from real estate sale exemption)
Potential Concerns (5)
Eliminating the gold bullion B&O tax exemption increases tax liability for gold dealers and investors, many of whom are high-net-worth individuals or specialized financial firms; the policy effectively taxes a luxury asset class that most Washingtonians do not hold, shifting a tax burden onto a narrow segment of wealthy taxpayers.
FinancialIndustryRef: Sec. 101 (repeal of RCW 82.04.062) and Sec. 102 (savings clause)Raising the B&O tax on prescription drug wholesalers significantly increases compliance and operational costs for large pharmaceutical distributors—many of whom are national or multinational corporations—which are likely to pass costs to pharmacies, insurers, and ultimately consumers through higher drug prices.
FinancialIndustryRef: Sec. 301 (B&O tax increase on prescription drug wholesalers from 0.138% to 0.484%)The self-storage tax creates a new administrative burden for small operators, and the affiliate rules (Sec. 201(2)–(3)) may incentivize complex corporate structuring to qualify for the lower rate—benefiting tax lawyers and consultants more than the operators themselves.
Business & EmploymentIndustryRef: Sec. 201 (self-storage B&O tax: 1.75% standard, 1.5% for <$1M gross income)The shift to a single-factor receipts-only apportionment for financial institutions may increase tax liability for some regional banks and credit unions operating in Washington, potentially reducing their ability to invest in local branches or lending—though large national banks are more likely to absorb or offset the impact.
Business & EmploymentLean industryRef: Sec. 203 & 204 (single-factor receipts apportionment for financial institutions)By taxing long-term self-storage rentals, the bill may indirectly increase costs for households using storage as a temporary housing solution (e.g., during moves, renovations, or homelessness), especially low- and middle-income residents who rely on affordable storage options.
HousingLean peopleRef: Sec. 202 (clarification that long-term self-storage rentals are taxable B&O activities despite real estate sale exemption)
Who Is Most Affected
Large national gold dealers and high-net-worth investors who hold bullion as an investment will face a new tax liability; this group is unlikely to be significantly impacted financially but may adjust investment strategies.
Pharmaceutical wholesalers—especially large national distributors like McKesson, Cardinal Health, and AmerisourceBergen—will face significantly higher tax costs, which may reduce margins or lead to price increases for pharmacies and consumers.
Small, locally owned self-storage operators with gross income under $1M may benefit from the lower 1.5% rate, but must navigate affiliate rules and compliance burdens; larger chains may absorb costs more easily.
Regional banks and credit unions may see increased tax liability under the new single-factor apportionment, while large national banks may be better positioned to adapt; overall, the impact leans negative for mid-sized institutions.
Low- and middle-income households using self-storage as a transitional housing tool (e.g., during moves or homelessness) may face higher storage costs, indirectly affecting housing stability.