Washington First cutoffs – and the highly anticipated income tax proposal -- arrive as lawmakers get ready for floor action

Published February 9, 2026 at 8:13 AM · Legislative Advocacy - Washington

The session’s first cutoff deadline for policy committees came on Wednesday, and while it didn’t narrow the field of bills substantially, the upcoming fiscal cutoff on Monday may stall some of the costlier proposals moving. Starting Tuesday, legislators will take to the floors of their respective chambers for long days of debates and voting, working in advance of the February 17^th House of Origin cutoff. As a reminder, revenue bills and others deemed “necessary to implement the budget” are not subject to cutoff deadlines and remain alive until the very end of session.

Below are selected highlights from the past week, along with a look ahead to notable action in the coming days. Additional bills being tracked, including those with upcoming action, are detailed in the attached bill report.

Taxes

Although Tuesday’s introduction of the income tax bill, dubbed the “Millionaire’s Tax” by proponents, took the headlines this week, there is a vast array of revenue proposals under consideration across a broad spectrum of activity. The Washington Research Council has cataloged 46 distinct tax bills on the table this session (not counting companion bills) in this useful summary.

Income Tax: HB 2724 and SB 6346 create a new state income tax on individuals (and married couples) beginning January 1, 2028, set at 9.9 percent. Even though the tax is imposed on individuals rather than business entities, it can still impact business income structured as pass-through entities, such as LLCs, partnerships, and S-corporations. The bill contains a series of complex apportionment and sourcing rules, including a “jock tax” on the portion of out-of-state professional athletes and staff pay earned during “duty days” in Washington. The bill was the subject of a contested hearing Friday in the Senate Ways & Means Committee, with proponents contending it would address regressivity in the state’s tax structure and boost available revenue for education and social programs, while opponents cited its apparent conflict with the state constitution, its impact on business innovation and competitiveness, and the likelihood it would be applied to more taxpayers in the future. All told, over 61,000 people signed into the hearing in opposition to the bill, with just over 19,000 signing in support – by far the most commented-on bill in legislative history.
Payroll Tax: HB 2100 imposes an excise tax on the portion of larger Washington employers’ payroll encompassing employees earning $125,000 or more annually. Under the proposed substitute heard in the House Finance Committee on January 22^nd, it would apply to employers of 250 or more (as opposed to the original 20 or more), with gross annual volume of $5 million or more, and a total payroll of $7 million or more. The proposal would also exclude health care and public sector employers. Finally, it would allow Seattle companies subject to the city’s similar JumpStart tax to claim a deduction. With all eyes on the income tax proposal, expect this one to go idle this session.
New Local Public Utility Tax & Sales Tax: HB 2442 and SB 6294 represent a far-reaching local tax measure that expands the use of local property tax revenues, authorizes a new county-imposed public utility tax, authorizes a new 0.01 percent sales tax increase to fund child and family services, and expands the authorized use of sales tax revenue by counties and cities to include various social services. While the Senate version was heard in Ways & Means on Thursday, the House version has had the most momentum, with a hearing in the Appropriations Committee on Thursday and vote out of the committee on Saturday.
Sales Tax on Services Follow Up: HB 2257 and SB 6113 is a Department of Revenue-requested “technical fix” bill following last year’s SB 5814 sales tax on services. It was voted out of the House Finance Committee on Wednesday with an amendment adopted to remove a troubling provision stating that if any part of the law’s provision excluding various activities from the sales tax on advertising services is declared invalid, then the entire list of exclusions would be invalidated. The concern there was that pending litigation challenging a portion of that advertising section, if successful, could invalidate the negotiated carve-outs for things like billboard advertising, signage at live events, naming rights, and fixed in-venue signage. The House version goes to the Rules Committee, while the Senate version is scheduled for a Ways & Means vote on Monday.
Governor Request B&O Insurance Tax Exemption Removal: HB 2487 and SB 5949, narrowing the statutory definition of “insurance business” for purposes of the insurance premium tax, with the effect of expanding the application of the B&O tax to insurance-affiliated activities, continues to move, albeit with more momentum on the House side. The House version is scheduled for a vote in House Finance on Monday, with no amendments anticipated, but with a pledge to convene the insurance stakeholders to discuss the bill’s scope and amendment requests.
Employer Assessment/Tax for Employee use of the State Medicaid Program: SB 6173, and the similar HB 2300, would assess private employers of more than 100 employees for the full cost of their employees who utilize state Medicaid for health insurance. Committee staff project the measure could yield as much as $700 million annually in revenue, based on a Health Care Authority report available here. The bills were idle this past week, but the Senate sponsor (Sen. Emily Alvarado, D-Seattle) raised eyebrows in a communication to stakeholders indicating her intent was also to include independent contractors within the assessment.

Technology, AI, and Consumer Regulation

Two highlights from the artificial intelligence and digital consumer regulation arena:

HB 2481, prohibiting surveillance-based or algorithmic pricing practices and imposing a moratorium on electronic shelf labels in grocery and retail establishments, was heard in the House Appropriations Committee on Thursday. The bill was scheduled for a committee vote on Saturday, but was held back for additional amendment discussion. It may come up for a vote on Monday. The Senate version, SB 6312, did not emerge from committee by Wednesday’s cutoff.
SB 6284, establishing consumer protections for “high-risk” AI systems, was originally thought to have legs but after being heard in the Senate Ways & Means Committee on Friday, it has not been scheduled for a committee vote ahead of Monday’s cutoff. A similar, but not identical proposal, HB 2157, has been sitting in the House Rules Committee. It requires developers and deployers of high-risk AI systems to use reasonable care to protect consumers from algorithmic discrimination and imposes a series of transparency and risk management requirements on developers and deployers of such systems. It has qualified exemptions for financial institutions and insurance operations whose anti-discriminatory obligations are set out in other laws.

Labor and Employment

Multiple labor and employment laws saw action this week:

HB 2144, requiring notice to employees regarding electronic monitoring used for performance evaluation, backed by administrative enforcement and a private right of action, was heard in the House Appropriations Committee on Friday. Originally scheduled for a committee vote on Monday, it was pulled from the calendar late Friday night.
HB 2471 and SB 6117, the NLRB “trigger” bill creating state-level labor relations regulation in the event federal law no longer pre-empts state law or the National Labor Relations Board declines or loses jurisdiction over labor disputes, was heard in the Ways & Means Committee on Wednesday and is scheduled for a vote on Monday. The House version is sitting in the Rules Committee.
HB 1155, last session’s ban on non-compete agreements and limitation on non-solicitation agreements, was pulled from the House Rules Committee and is eligible for a floor vote. Its companion, SB 5437, also received a pull from the Senate Rules Committee on Monday. Either vehicle could move in advance of the House of Origin cutoff on the 17^th.
HB 2105, the Attorney General’s Immigrant Worker Protection Act, requiring 72-hours’ notice to current and former employees of a federal I-9 work eligibility audit, was heard in the House Appropriations Committee on Thursday and was voted out of committee on Saturday. Its Senate companion, SB 5852, was before the Ways & Means Committee but did not move.

Payroll-Tax-Funded Programs and Workers’ Compensation

While the first few weeks of session saw many proposals to expand workers’ compensation benefits, the field is beginning to narrow.

SB 5847, narrowing the Labor & Industries Medical Provider Network and imposing penalties for employers found to have directed medical care, was heard in the Ways & Means Committee on Thursday. Employers and claimants’ attorneys have a tentative agreement on clarifying the bill’s prohibition and penalty around directed medical care. The bill is set for a committee vote on Monday.
HB 2243 and SB 6152, expanding the definition of attending provider to include physical and occupational therapists, died on the House side at Wednesday’s cutoff, but remains in the Rules Committee on the Senate side.
HB 2372 and SB 6067, a highly expensive bill to include the value of employer-provided health insurance in an injured worker’s time loss or pension benefits when an employer does not continue to provide coverage, appears to be dead having failed to come up in the House Appropriations Committee this week, and while the Senate version was heard in Ways & Means on Thursday, it is not currently scheduled for a vote.
HB 2188, requiring additional transparency in industrial insurance rate-setting, is in the House Rules Committee, while its Senate companion, SB 6136, was pulled from the Senate Rules Committee on Tuesday.
SB 5292, modifying the statutory basis for setting Paid Family & Medical Leave premium rates in favor of actuarial determination, was heard in the Senate Ways & Means Committee this past Monday and is scheduled for a committee vote this coming Monday.

Liability Reform and Litigation

Tort reform highlights from this week include:

HB 2255, regulating third-party litigation funding and requiring disclosure of funding arrangements, was voted out of the House Civil Rights & Judiciary Committee on Wednesday and is before the House Rules Committee.
HB 2095, creating a presumption of negligence for motorists involved in collisions with “vulnerable roadway users,” was amended lightly (to exempt emergency vehicles) and passed out of the Civil Rights & Judiciary Committee on Tuesday. It is before the House Rules Committee.
SB 6239, requiring non-binding arbitration for certain tort claims against the state and its political subdivisions, was heard in the Senate Ways & Means Committee on Thursday and is scheduled for a committee vote on Monday.

Insurance

Insurance-related legislation continued to move, with several Commissioner-requested bills advancing and additional regulatory proposals scheduled for action.

SB 5928, requiring disclosure of wildfire risk scores, is on the Senate floor for potential action. Insurers have been working with the Commissioner and sponsors on amendments to clarify the scope of the disclosure requirement.
SB 6079, establishing a wildfire mitigation grant program while restricting underwriting based on IBHS designations, was heard in the Senate Ways & Means Committee on Friday, and is set for a committee vote on Monday. Unfortunately, its underwriting restrictions remain in place, and have gotten more explicit, causing some of the insurance associations to reconsider support for the grant program.
SB 6031 and HB 2394, strengthening OIC’s fraud prevention tools, did not move in the House Consumer Protection & Business Committee ahead of the policy cutoff, while the Senate vehicle remains in the Rules Committee.
SB 6178 and HB 2399, the Commissioner’s request to ban post-loss assignment of benefits agreements, limped out of the House committee on Wednesday on a split vote, however the Senate companion passed off the Senate floor Thursday on a unanimous vote.
HB 2087 and SB 6248, adopting the NAIC model travel insurance regulation, moved out of the Senate Business, Trade & Economic Development Committee on Wednesday, and went to the Rules Committee. The House vehicle appears dead, having been referred to the Appropriations Committee but without activity scheduled.
HB 2428, requiring proof of delivery for life insurance lapse notices and notice of reinstatement rights, was voted out of the Consumer Protection & Business Committee on Wednesday, with a clarifying amendment worked out between the bill’s sponsor and industry. It is before the House Rules Committee.

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