SHB 1095: B&O tax exemption for COVID-19 emergency grants

WSHA strongly supports SHB 1095, which exempts emergency-related state or federal grants from business and occupation (B&O) tax as long as the grants are spent on emergency expenditures consistent with the grant’s terms. WSHA provided input to the Department of Revenue to ensure the exemption also applies to federal and state grants provided through authorized third-party organizations. The bill also contains a provision that exempts grantees from the sales and use tax on grants received, though purchases using grant funds will still be subject to sales and use tax. Given that the sales tax rate is higher than the B&O tax rate, this provision provides significant benefit in addition to the B&O exemption. SHB 1095 passed both chambers of the Legislature and has been delivered to the governor for his signature. This legislation will be helpful for COVID relief, as it will allow funding to be more impactful since much of it will not be subject to tax. Read more from WSHA’s issue brief. (Andrew Busz, Andrewb@wsha.org)