Rental of real estate

From the 2024 DOR Tax Exemption Study

82.04.280 - Rental of real estate Description Income from the long-term rental of real estate is not subject to B&O tax. Long- term means a continuous period of one month or more. In 1959, the legislature extended the B&O tax to income from the rental of real estate. The following year the State Supreme Court ruled the tax to be unconstitutional in Apartment Operators Association of Seattle v. Schumacher, 56 Wn. 2d 46 (1960). The Washington Supreme Court later questioned the validity of Schumacher, but never specifically overturned the holding. While Chapter 82 RCW does not explicitly provide an exclusion for the rental of real estate it also does not include the activity in the list of those subject to tax. Purpose The Supreme Court held that a B&O tax on rental income constitutes a tax on property. The State Constitution requires that property taxes be levied uniformly and B&O tax, in addition to property taxes, would result in non-uniform taxation. Taxpayer ($ in millions): savings FY 2024 FY 2025 FY 2026 FY 2027 State Taxes $76.759 $79.373 $82.815 $89.255 Local Taxes $0.000 $0.000 $0.000 $0.000 Repeal of Taxing real estate rental income would directly challenge Washington Supre