WeVote
Log In

Bill

Bill

SB 5766

Clarifying the business and occupation tax treatment of the investment income of passive investment vehicles managed by a person subject to business and occupation tax under RCW 82.04.290(1).

2025-2026 Regular Session Introduced by John Braun and 3 co-sponsors

SB 5766 clarifies Washington B&O tax treatment of passive investment vehicle income for tax-subject investment managers to reduce compliance ambiguity and ensure consistent taxation.

First reading, referred to Ways & Means.
0
WeVote Research Nonpartisan
Bill Summary · SB 5766

Legislative bill overview

SB 5766 modifies Washington State's business and occupation (B&O) tax code to clarify how investment income from passive investment vehicles is taxed when managed by persons already subject to B&O tax. The bill specifically addresses the tax treatment under RCW 82.04.290(1), which deals with income from managing investments. This is a technical clarification bill aimed at reducing ambiguity in how passive investment income should be taxed.

Why is this important

Washington's B&O tax applies to nearly all business activities in the state, including investment management. Ambiguity in how passive investment income is taxed can create compliance confusion for investment managers and inconsistent tax collection for the state. Clarifying these rules affects both tax obligations for investment firms and state revenue, while potentially impacting competitiveness of Washington-based investment management businesses.

Potential points of contention

  • Tax burden clarification: The bill may clarify rules in ways that either increase or decrease tax obligations for investment managers, creating winners and losers among business taxpayers
  • Passive vs. active income distinction: Defining what constitutes "passive" investment income versus active management income can be complex and contentious, potentially affecting how different investment vehicles are classified
  • Revenue impact: Any clarification that reduces tax obligations could affect state revenue; any that increases them faces business community pushback

Compiled from official sources — confirm details with the bill’s official record.

Sign in to ask a question.