House Bill 2089 Inconsistent Intent Expands B&O Taxation to All Lenders
By Cindy Alia 1/5/26
Concise Analysis of HB 2089 (Wildfire Alleviation Support Act) –
The Core Change:
Effective July 1, 2026, the bill amends RCW 82.04.29005 by removing the "located in more than ten states" qualifier for banking institutions. This eliminates the B&O tax deduction for interest on residential first mortgages (previously available to lenders operating in 10 or fewer states), subjecting all such interest income to Washington's B&O tax at the service rate (~1.5–1.8%).
Stated Intent vs. Actual Effect –
