Investments by nonfinancial firms

From the 2024 DOR Tax Exemption Study

82.04.4281(1)(a) - Investments by nonfinancial entities Description Businesses outside the financial sector, individuals, nonprofits, trusts, and estates qualify for a B&O deduction for investment income provided they are not engaged in banking, lending, or securities business activities. Purpose Recognizes that incidental investment income does not constitute taxable business income. Provides a positive environment for capital investment in Washington. Taxpayer ($ in millions): savings FY 2024 FY 2025 FY 2026 FY 2027 State Taxes $337.300 $337.700 $342.400 $351.400 Local Taxes $0.000 $0.000 $0.000 $0.000 Repeal of Repealing this deduction would increase revenues; however, most investment exemption income could move out of Washington. Also, locating all persons with taxable income may be difficult. Potential ($ in millions): revenue gains FY 2024 FY 2025 FY 2026 FY 2027 from full repeal State Taxes $0.000 $152.800 $320.800 $325.300 Local Taxes $0.000 $0.000 $0.000 $0.000 Assumptions - This repeal takes effect July 1, 2024. - Individuals must file annually, with payments due each April for income received in the prior calendar year. The first collections will occur in April 2025. - A