Washington Enacts Major Tax Reform Including Business and Occupation Tax Changes

On 20 May 2025, the governor of the U.S. state of Washington signed a major tax reform package into law, including Bill HB 2021, which contains several changes to the Business and Occupation (B&O) tax on gross receipts. The main changes are summarized as follows:

• The various base B&O rates for extractors, manufacturers, retail and wholesale sales, etc. are increased to a uniform rate of 0.5%, effective 1 January 2027;
• A B&O surcharge at a rate of 0.5% is introduced on businesses…