Senate approves tax clarification for insurers despite objections over retroactive charges

The Washington State Senate passed Engrossed House Bill 2487 on March 11, a measure sponsors described as clarifying how insurance companies and their affiliates are taxed.

Sponsor Senator Robinson told the chamber the bill makes clear that the core insurance business is taxed through the state's premium tax, while affiliate organizations that do not directly receive premiums would be taxed under the business-and-occupation (B&O) tax like other corporations. "This is about tax fairness," Robinson said, "treating companies and our insurance companies and their affiliates as everyone else in the state pays taxes."

Senator Gildan objected to a retroactive element of the bill, arguing it reaches back to 2019. On the floor he said the Department of Revenue's earlier determination had been litigated through the state Supreme Court, which had ruled the affiliates were not required to pay at that time; applying the tax retroactively, he argued, is unfair to businesses that complied with then-existing law.

A roll-call vote recorded 27 ayes and 22 nays; the presiding officer announced a constitutional majority and the bill was declared passed. The bill will be enrolled and the act's title will serve as the title of the final law.