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SB 5431

Modifying tax and revenue laws in a manner that is not estimated to affect state or local tax collections.

2025-2026 Regular Session Introduced by Perry Dozier and 3 co-sponsors

SB 5431 makes administrative, technical amendments to Washington tax laws to clarify rules, align deadlines, and improve DOR administration, with no anticipated revenue change.

Effective date 7/27/2025.
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Bill Summary · SB 5431

SB 5431 — Summary (Chapter 411, 2025 Laws)

Status & Key Dates
- Passed both chambers unanimously; delivered to Governor 4/23/2025; signed 5/20/2025.
- Effective date: July 27, 2025.
- Fiscal note: available. No appropriation. Bill described as technical/administrative and not estimated to affect state or local tax collections.

Purpose
- Make administrative, technical, and clarifying amendments to Washington tax and revenue statutes per Department of Revenue (DOR) recommendations. The changes remove obsolete language, correct references, codify certain practices, and align statutory deadlines with budget processes.

Major provisions (by topic)
- Tax preference reporting and TPPS references
- Replaces outdated references to the DOR “survey” with the DOR’s annual tax performance (tax preference) report in uncodified tax preference performance statements (TPPS) for specified solar-manufacturing tax preferences. This ensures JLARC can access the correct DOR data for reviews.
- The bill itself is exempt from a TPPS, JLARC review, and the automatic 10‑year expiration that normally applies to new or expanded tax preferences.

  • Retail sales/use tax reporting and medical equipment billing

    • Codifies the existing practice for medical-supply vendors that sell durable medical equipment and mobility enhancing equipment when insurers pay: vendors may “back out” retail sales tax from amounts received from insurers only when the vendor’s contract with the insurer is a fixed amount and the vendor cannot collect any balance from the covered person.
    • Requires the state sales tax to be listed separately from selling price on invoices (vending-machine sales remain exempt from that invoice requirement).
    • Adds/clarifies a statutory definition of “health insurance provider” to include commercial insurers as well as Medicaid and Medicare programs.

  • Data center sales/use tax exemption (rural county)

    • Clarifies how the DOR treats positions that did not exist or were vacant when an exemption certificate was issued, for the employment‑growth requirements tied to rural county data center purchase exemptions (applies to large qualified data centers and certificate/refurbishment rules).

  • Tax exemption study timing

    • Moves the due date for the next DOR tax exemption study to January 2029 and thereafter every four years, aligning the study with the start of the biennial budget process. Removes obsolete references (e.g., to the 2012 study).

  • Property valuation accreditation (RCW 36.21.015)

    • Revises assessor/valuer exam language: requires passing the IAAO Course 101 exam (or equivalent as determined by DOR) or receiving an exam waiver based on equivalent education/experience; authorizes continuing education and coordination with certified real estate appraiser requirements.

  • Seller liability and exemption certificates (RCW 82.08.050)

    • Clarifies procedures/timelines for sellers to obtain exemption certificates or required data elements (e.g., relief from personal liability if a fully completed exemption certificate is obtained within 90 days or other specified periods; blanket exemption certificates for recurring business relationships defined). (Note: statutory text is technical and partially truncated in source; summary reflects the bill’s intent to clarify seller liability and documentation timelines.)

Who is affected
- Department of Revenue (administration, reporting, studies).
- Sellers and vendors (recordkeeping, invoice presentation, exemption-certificate processes).
- Medical-supply vendors and health insurers (billing and tax remittance practices).
- Owners/tenants of rural data centers seeking sales/use tax exemptions.
- County assessors and property valuation staff (accreditation/exam requirements).
- JLARC and policymakers (access to correct DOR reports; timing of exemption study).

Net impact
- Administrative/clarifying changes intended to improve statutory alignment, reporting, and DOR administration. The bill is not estimated to change state or local tax collections.

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

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