Committee hears debate on bill narrowing B&O tax exemption for insurance affiliates

Engrossed House Bill 2,487, a Department of Revenue request bill, was the subject of a lengthy briefing and public testimony in the Ways and Means Committee on March 9, 2026. Proponents said the bill restores the original intent of the exemption; opponents warned it could amount to a new tax on insurance activity and raise consumer premiums.

Geoff Mitchell, staff to the committee, told lawmakers the bill "specifies that the B and O exemption applies only to the insurer paying the premium tax and is limited to the revenue on which the premium tax was paid." He explained the measure responds to a 2024 Washington Supreme Court decision that interpreted the exemption broadly and led to affiliates of insurers claiming the exemption even when they did not collect premiums or pay the premium tax.

The bill would make that limitation retroactive to Oct. 2,…