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Bill

Bill

HB 2020

Creating a business and occupation tax deduction and increasing the rate for persons conducting payment card processing activities.

2025-2026 Regular Session Introduced by April Berg and 5 co-sponsors

Washington increases B&O tax on payment card processors while creating deductions for other businesses, effective January 2026, altering state tax obligations.

Effective date 1/1/2026.
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WeVote Research Nonpartisan
Bill Summary · HB 2020

Legislative bill overview

HB 2020 modifies Washington State's business and occupation (B&O) tax by creating a deduction for certain business activities while simultaneously increasing the tax rate specifically for payment card processing activities. The bill became law on May 20, 2025, and takes effect January 1, 2026.

Why is this important

This legislation directly affects how businesses are taxed in Washington, which influences operating costs and competitiveness. Payment card processing companies—which facilitate credit/debit transactions for retailers—will face higher tax burdens, while other businesses may benefit from the new deduction, potentially reshaping the tax landscape for different business sectors.

Potential points of contention

  • Targeted rate increase: Singling out payment card processors for a higher tax rate raises questions about fairness and whether this creates competitive disadvantages or discourages the industry from operating in Washington
  • Deduction details unclear: Without specific information on which businesses qualify for the new deduction, there's uncertainty about whether the tax relief is equitably distributed
  • Economic impact: Higher costs for payment processors could theoretically increase transaction fees passed to consumers and small retailers, offsetting intended benefits

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

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