House Finance reviews broad B&O changes including surcharge on largest firms, higher advanced-computing rate

House Bill 2,081 would alter Washington’s business-and-occupation (B&O) tax structure in several ways: raise the services-and-other-activities rate for large businesses, increase several standard rates toward 0.5 percent, impose a temporary surcharge on very large businesses, raise the advanced-computing surcharge and clarify tax treatment of nonprofits’ investment income following a recent state court decision.

Key provisions briefed to the committee include a change that raises the services-and-other-activities B&O rate for businesses with gross income over $1 million to 2.1 percent beginning Oct. 1, 2025. The bill would raise standard manufacturing, extracting, wholesaling and retailing rates to 0.5 percent beginning Jan. 1, 2027, and the advanced-computing surcharge would increase to 5 percent beginning Jan. 1, 2026, with the annual cap on that surcharge raised from $9 million to $50 million.

Part 2 of the bill would impose an additional 0.5 percent B&O surcharge on businesses with at least $250 million in Washington taxable income, effective Jan. 1, 2026; that surcharge would expire…