SB 6297
In CommitteeSenate
Behavioral health staffing
Making temporary staffing services provided to nonprofit behavioral health entities exempt from retail sales tax.
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 removes retail sales tax on temporary staffing services provided to nonprofit behavioral health agencies in Washington. It clarifies that such services are not subject to sales tax, even though staffing services are generally taxable when provided to other businesses. The change applies to services delivered starting July 1, 2026.
- Amends the definition of 'retail sale' in RCW 82.04.050 to exclude temporary staffing services provided to nonprofit behavioral health entities from retail sales tax.
- Defines 'nonprofit behavioral health entity' as a nonprofit organization exempt under 26 U.S.C. § 501(c)(3) that provides behavioral health services (as defined in RCW 71.24.025).
- Clarifies that 'temporary staffing services' has the same meaning as 'staffing services' in RCW 82.04.540, but explicitly excludes services provided to hospitals and—new—nonprofit behavioral health entities.
- Makes the exemption effective for services provided on or after July 1, 2026.
- States that existing tax rules for staffing services (e.g., taxability when provided to hospitals) remain unchanged.
Who is affected
- Nonprofit behavioral health entities — Nonprofit behavioral health agencies that use temporary staffing services will no longer have to pay retail sales tax on those services, reducing their operating costs.
- Temporary staffing service providers — Staffing agencies that provide workers to nonprofit behavioral health entities will no longer be required to collect retail sales tax on those services, simplifying their tax reporting.
Pro/Con Analysis
Stronger case for benefits
Potential Benefits (3)
Nonprofit behavioral health agencies—many of which serve low-income, uninsured, or underinsured residents—will see reduced operating costs, allowing them to expand or sustain services like counseling, crisis response, and substance use treatment.
HealthcarePeopleRef: Sec. 1, amending RCW 82.04.050(3)(j)(ii) and (iii)Temporary staffing agencies that serve nonprofit behavioral health entities will no longer collect sales tax on those contracts, simplifying compliance and reducing administrative burden—especially beneficial for small- to mid-sized staffing firms in rural or underserved areas.
Business & EmploymentLean peopleRef: Sec. 1, amending RCW 82.04.050(3)(j)(ii) and (iii)By lowering costs for behavioral health providers, the bill may improve access to mental health and crisis intervention services, potentially reducing reliance on law enforcement for non-criminal behavioral health emergencies.
Public SafetyPeopleRef: Sec. 1, amending RCW 82.04.050(3)(j)(ii) and (iii)
Potential Concerns (1)
The state will lose $2.5 million over the 2025–27 biennium in sales tax revenue, reducing funds available for public services like education, transportation, and healthcare—services many Washingtonians rely on.
FinancialRef: Sec. 1, amending RCW 82.04.050(3)(j)(ii) and (iii)
Who Is Most Affected
Nonprofit behavioral health agencies—especially those serving Medicaid beneficiaries, low-income populations, or rural communities—will benefit from lower operating costs, enabling them to retain staff, expand service hours, or reduce client fees. However, agencies that already operate at high margins or serve primarily insured clients may see less benefit.
Staffing agencies that supply clinical and paraprofessional workers (e.g., counselors, case managers, peer support specialists) to these agencies will benefit from simplified tax compliance and potentially increased demand for their services, particularly if agencies use savings to hire more staff. Smaller agencies with fewer than 50 employees are most likely to see net positive effects.
Low- and moderate-income Washingtonians—particularly those on Medicaid or without insurance—who rely on nonprofit behavioral health agencies for counseling, crisis response, or addiction services are likely to benefit from improved service availability and affordability. However, they bear no direct cost and gain no direct tax benefit.
The state’s general fund and local governments (e.g., counties providing behavioral health contracts) may face indirect costs due to the $2.5M revenue loss, potentially limiting future investments in public health infrastructure or requiring reallocation from other human services. This could negatively affect service equity across regions.
Large staffing agencies with contracts across multiple sectors (e.g., hospitals, schools, corporate clients) may see minimal net impact, as the exemption only applies to one narrow segment. Meanwhile, large behavioral health systems (e.g., Providence, Kaiser WA) may benefit more than smaller community clinics due to scale, even if they are nonprofits.