On February 28, 2025, Washington House Bill 1614 was introduced, aiming to enhance tax compliance and reporting for long-term capital gains. The bill primarily seeks to address issues surrounding the accurate reporting of capital gains by brokers and barter exchanges, ensuring that the state receives timely and accurate tax information.

One of the key provisions of House Bill 1614 mandates that brokers and barter exchanges electronically submit copies of the United States Internal Revenue Service Form 1099-B to the Washington Department of Revenue. This requirement applies specifically to sales or exchanges of long-term capital assets where the gains are allocated to Washington state. The deadline for submission is set at 90 days following the filing of the form with the IRS.

The bill also introduces penalties for non-compliance, imposing a $50 fine for each failure to submit the required forms or for willfully filing false information. Additionally, it establishes a rebuttable presumption that long-term capital gains are allocated to Washington state under certain conditions, such as the payee's domicile or address being within the state.

Debate surrounding House Bill 1614 has focused on its implications for tax compliance and the administrative burden it may place on brokers and exchanges. Proponents argue that the bill will improve tax collection and ensure that individuals are paying their fair share, while opponents express concerns about the potential for increased regulatory oversight and the costs associated with compliance.

Economically, the bill could lead to increased revenue for the state by closing loopholes in capital gains reporting. Socially, it aims to create a more equitable tax system by ensuring that all individuals, regardless of their financial status, contribute appropriately to state revenues.

As the legislative process unfolds, experts suggest that the bill's passage could set a precedent for similar tax compliance measures in other states, potentially reshaping how capital gains are reported nationwide. The outcome of House Bill 1614 will be closely monitored by stakeholders across the financial and regulatory sectors, as its implications could resonate well beyond Washington state.