HB 2130
In CommitteeHouse
New 2025 taxes repeal
Repealing new taxes imposed by Engrossed Substitute Senate Bill No. 5814 during the 2025 regular legislative session.
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 repeals eight specific sections of 2025 c 422, which included several new taxes passed during the 2025 legislative session — such as a gross receipts tax on large retailers and a new B&O tax on certain service businesses. The repeal eliminates those taxes, effective April 1, 2026.
- Repeals Section 1 (uncodified) of 2025 c 422, which established a new business and occupation (B&O) tax rate on certain service businesses.
- Repeals Sections 101, 201, and 301 of 2025 c 422, which created new gross receipts taxes on large retailers, telecommunications companies, and digital advertising services.
- Repeals Sections 401–404 (uncodified) of 2025 c 422, which included administrative provisions, revenue allocation rules, and definitions tied to the new taxes.
Who is affected
- Washington businesses — Businesses that were subject to new taxes on gross receipts, business and occupation (B&O) taxes on specific industries, or other taxes created in 2025 c 422 — these taxes would be eliminated, reducing compliance and payment obligations.
- Washington residents — Residents and households who may have faced higher costs due to new taxes passed in 2025 — with repeal, those costs would no longer be added to prices or services.
- State and local governments — State and local governments that had planned to collect and allocate revenue from the repealed taxes — they would need to adjust budgets and revenue forecasts accordingly.
Pro/Con Analysis
Stronger case for concerns
Potential Benefits (3)
May reduce prices for consumers if businesses pass on tax savings — though evidence suggests gross receipts taxes are often passed to consumers, so repeal could modestly lower prices for telecom, digital services, and retail.
Business & EmploymentLean peopleRef: Sec. 1(2), (3), (4) (repealing gross receipts taxes)May increase availability and affordability of professional services (e.g., consulting, IT, marketing) for small businesses and consumers if service providers reduce fees in response to lower tax burden.
Business & EmploymentLean peopleRef: Sec. 1(1) (repealing B&O tax on service businesses)Reduces complexity for local governments that must collect and remit these taxes, easing administrative burden — though local revenue impact is minimal since these are state-level taxes.
Local GovernmentLean peopleRef: Sec. 1(2), (3), (4)
Potential Concerns (6)
Eliminates compliance and administrative burdens for affected businesses (e.g., digital ad platforms, telecom firms, large retailers), potentially reducing operational costs and simplifying tax filing.
Business & EmploymentRef: Sec. 1(2), (3), (4) (repealing gross receipts taxes on large retailers, telecom, digital advertising)Reduces tax liability for service-sector businesses (e.g., consulting, software, marketing), which may improve profitability and capacity for hiring or wage growth — though evidence on actual hiring effects is mixed.
Business & EmploymentRef: Sec. 1(1) (repealing B&O tax on certain service businesses)Reduces state revenue by $1.2B over two years, threatening funding for essential services like public safety, corrections, and emergency response unless offset by spending cuts or alternative revenue.
Public SafetyPeopleRef: Fiscal Impact: $1.2B revenue loss over 2026–27 bienniumLoss of $1.2B in projected revenue reduces capacity to fund K–12 basic education, higher education, or early learning programs — disproportionately affecting under-resourced school districts that rely heavily on state funding.
EducationPeopleRef: Fiscal Impact: $1.2B revenue loss over 2026–27 bienniumReduces state capacity to fund Medicaid (Apple Health), mental health services, and substance use treatment, potentially increasing wait times and reducing access for low-income and vulnerable populations.
HealthcarePeopleRef: Fiscal Impact: $1.2B revenue loss over 2026–27 bienniumReduces funds available for affordable housing programs, rental assistance, and homeless services — programs already facing severe underfunding — worsening housing instability for low- and middle-income households.
HousingPeopleRef: Fiscal Impact: $1.2B revenue loss over 2026–27 biennium
Who Is Most Affected
Large retailers, telecom firms, and digital ad platforms (e.g., Amazon, Google, Meta) that were subject to gross receipts taxes will no longer owe those taxes, significantly lowering compliance and payment obligations.
Small and mid-sized service businesses (e.g., consulting firms, marketing agencies, software developers) that were subject to the new B&O tax on services may see improved margins and capacity to invest or hire.
State and local governments will face a $1.2B revenue shortfall over two years, requiring budget cuts or alternative revenue sources — this will likely reduce funding for public services that benefit everyday Washingtonians.
Low- and middle-income households may benefit from modest price reductions in services and retail, but will bear the brunt of reduced public services (healthcare, education, housing, public safety) due to revenue loss.
Wealthy individuals and shareholders in large corporations benefit disproportionately from tax cuts, as they own the majority of corporate stock and benefit from increased profitability and stock value.