House Bill 16 14 received a detailed staff briefing Feb. 18 in House Finance as the Department of Revenue and the bill’s sponsor described technical changes intended to improve administration of the Washington capital gains tax.

Tracy Taylor, staff to the committee, walked members through the bill’s major changes, including repeal of the existing B&O credit effective Jan. 1, 2026 (preserving taxpayer rights to claim the credit for earlier periods), creation of a nonrefundable capital‑gains tax credit for B&O taxes paid effective Jan. 1, 2026, clarifications on adjusted capital gains (including treatment of long‑term capital loss carryforwards and Section 1256/1256‑style contracts), and expanded reporting and broker 1099‑B requirements to the Department of Revenue. The bill also updates inflation adjustments and revises several penalty and waiver provisions.

Sponsor Representative Milin Tai described the bill as an agency request to address implementation questions raised since the capital gains tax took effect and said the bill responds to constituent and CPA requests for clearer rules. Department of Revenue officials told the committee the proposal reflects two years of administering the tax and identified administrative costs in the DOR fiscal note (first‑year DOR costs estimated at $535,000; subsequent-year costs lower).

The Washington Society of CPAs testified that they had concerns about one provision (section 9) requiring federal forms from other persons; after working with DOR staff, the language was revised to avoid forcing preparers to disclose third‑party federal return information and to preserve professional confidentiality. DOR said the parties negotiated clarifying amendments and that the amendment does not change the substantive policy.

No final committee action was taken; the committee suspended the hearing to take testimony at a later time.

Ending: Committee staff and the bill sponsor said they will continue to work with stakeholders on technical clarifications as the substitute is finalized.