Advocacy Update - June 2025

Government and Industry Affairs updates for June 2025

On June 12^th, BOMA Greater Seattle’s Local Advocacy Consultant-Catherine Stanford, BOMA President-Rod Kauffman, and Director of Operations-Cori Taniguchi, along with other leaders in real estate, met with Seattle City Council President Sara Nelson and City Attorney Ann Davison.

Sara Nelson

Ann Davison

These local elected officials spoke directly about efforts to restore public safety by increasing police hiring and training, addressing issues related to homelessness and crime, and rebuilding a strong economic future for Seattle.  The BOMA PAC of Washington also supports these two leaders running for re-election. If you would like to contribute to the PAC, you can do so via this link: https://www.bomaseattle.org/donations/donate.asp?id=12887

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City of Seattle Clean Buildings Rulemaking

Draft BEPS Director's Rule Available for Public Comment - Comments due July 7

The Seattle Office of Sustainability and Environment (OSE) has released the draft Buildings Emissions Performance Standard (BEPS) Director’s Rule. Per Seattle Municipal Code (SMC), a Director's Rule is the required next step to clarify topics such as required documentation, processes for compliance and reporting, and other key elements flagged for rulemaking in the BEPS law, SMC 22.925 — Building Emissions Performance Standard.

This draft rule covers nearly all rules needed for compliance with BEPS, which starts with the largest buildings reporting by Oct. 1, 2027. For a quick refresher on the BEPS law, watch this 12-minute recording on the basics of BEPS.  

OSE is hosting a three-week public comment period through July 7 at 5 p.m. PT to solicit input on the draft Director’s Rule.

When commenting, please include the page number(s) and the section(s) you are commenting on. You can submit your comment in the following ways:

• Using OSE’s online form (preferred)
• Emailing cleanbuildings@seattle.gov (please include “BEPS Public Comment” in the subject line)
• Writing to the Director, Seattle Office of Sustainability & Environment, PO Box 94729, Seattle, WA 98124, postmarked no later than July 7, 2025

Additional required rulemaking to cover limited topics such as updating emissions factors for 2031–2035 and other elements noted in this draft Rule and specified in SMC 22.925 will take place by Dec. 31, 2027, and at later dates as specified in SMC 22.925.

SUBMIT A RULE COMMENT

About the Rulemaking Process: The Rule is the product of more than a year of public engagement, building off the more than two years of engagement with stakeholders that preceded the BEPS law itself. To develop the Rule, OSE has:

• Convened a Technical Rulemaking Workgroup with subject matter experts from multiple sectors to weigh in on options to inform the draft. 
• Facilitated topic-specific focus groups (e.g., affordable housing, decarbonization plans, hospitals and labs, commercial real estate, and more). 
• Hosted two public webinars for feedback on key elements of the draft rule. 

SMC 22.925 includes the following building owner requirements:

• Starting in 2027, verify the previous year’s energy and emissions benchmarking data (reported to City per SMC 22.930) via Benchmarking Verification to ensure it is accurate and up to date.
• Starting in 2027, document current greenhouse gas intensity (GHGI), estimated GHGI targets (GHGIT), building equipment, and actions needed to achieve targets via a GHG Report.
• Starting in 2031, demonstrate that the building’s previous year’s emissions meet GHGIT or achieve alternative compliance. (Unless approved for an extension or exemption).
• Repeat this compliance process for each five-year compliance interval.
• By 2050 or earlier, depending on building size and type, achieve net-zero emissions.

To learn more about BEPS and the draft Director’s Rule, visit the BEPS website.

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Washington State Clean Buildings Rulemaking

BOMA supported HB1543 as it provides additional pathways to compliance. Informational sessions on and the rulemaking process will be held by the Department of Commerce.

This is also your last opportunity to take the HB 1543 Survey. The Clean Buildings Team wants your suggestions for alternative compliance pathways, extensions and exemption ideas. Please complete the survey before June 18.

Commerce filed the CR-101 to initiate the rulemaking process. We'll host a series of workshops to establish rules and reporting requirements for HB1543 and solicit public comments. Please join us for a rulemaking informational session and rulemaking workshops.

• June 18, 10-11 a.m. - Register for informational session: HB1543 and the rulemaking process
• July 2, 10 a.m.-12 p.m. - Register for HB1543 Rulemaking- Workshop 1: Extensions and exemptions
• July 23, 10 a.m.-12 p.m. - Register for HB1543 Rulemaking- Workshop 2: Alternative Compliance Pathway
• Aug 13, 10 a.m.-12 p.m. - Register for HB1543 Rulemaking- Workshop 3: Comprehensive review

We will record all events and post the recordings on the Clean Buildings webpage.

For additional questions or support, please contact us through our Clean Buildings Customer Support Form Ticket or email us at buildings@commerce.wa.gov.

Clean Buildings Portal Update
We made some updates and improvements to the Clean Buildings Portal.

What’s new?

• Shifted from parcel-based to building-based information
• Enhanced look of the building’s details page
• Updated Form B to support non-target and vacant spaces
• Enhanced look to Form C
• Added a new Grouping feature to support buildings that comply as a campus building, campus-connected building, or campus-level building
• Added a new Form J, which supports group buildings' compliance
• Added a Decarb District Energy System application

While existing Portal users may already be experiencing the exciting updates, for new users, please visit the Clean Buildings webpage to learn how to access the portal.

If you have questions or encounter any issues with the new features, please complete the Customer Support Form.

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Please consider joining a task force BOMA Washington State is forming to help guide potential new state Boiler licensing and certification regulations.  Please contact Rod Kauffman in the BOMA office with any questions or interest.  rkauffman@bomaseattle.org

As general information, the Board of Boilers Rules and the Washington State Department of Labor & Industries (L&I) have adopted two changes taking effect on July 1, 2025, as they relate to program fees and makes clarifications to the definition of pool heater.

The fee is raised 6.41% fee increase.

The proposal also clarifies inspection requirements for inspectors and installers.

See below for additional information.

L&I Adopts Fee Increases and Definition Change for Boiler

The Board of Boiler Rules and the Washington State Department of Labor & Industries (L&I) have adopted two changes that take effect July 1. One change is an increase to the agency’s Boiler Program fees, and another clarifies the definition of pool heaters.

See a list of affected Washington Administrative Codes at the end of this message.

About the changes
The agency adopted a 6.41% fee increase to cover operating expenses. It represents the maximum the state Office of Financial Management calculated for fiscal year 2026.

Another adopted change modified the definition of pool heaters.  The result clarifies inspection requirements for inspectors and installers and not change any requirements. 

The agency filed the Rulemaking Order (CR-103) on April 22.  The adopted changes take effect July 1, 2025.  

You can find out more about this rulemaking at https://www.lni.wa.gov/rulemaking-activity/?query=296-104&cardNo=AO24-31 or https://lni.wa.gov/licensing-permits/boilers/laws-rules.

If you have any questions, please feel free to contact me at Boiler@Lni.wa.gov, or call 360-902-5270.  If you need additional information or have questions about the rulemaking process, please contact Meagan Edwards at 360-522-0125 or Meagan.Edwards@lni.wa.gov

Changes affect the following:
• WAC 296-104-010, Administration—What are the definitions of terms used in this chapter?
• WAC 296-104-700, What are the inspection fees – Examination fees – Certificate fees – Expenses?

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The Department of Labor & Industries (L&I) updated its rulemaking website

Rules filed June 3, 2025

For information on all L&I meetings and public hearings related to rulemaking, please visit our public participation calendar.

Division: Field Services and Public Safety (Elevator Program)

Topic: Proposal (CR-102) – Elevator Fees Increase (FY26)

Brief Description: The purpose of this rulemaking is to propose a 6.41% fee increase for inspections of conveyances and other Elevator Program services under Chapter 296-96 WAC, Safety regulations and fees for all elevators, dumbwaiters, escalators and other conveyances. This is the Office of Financial Management’s maximum allowable fiscal growth factor rate for fiscal year 2026. The fee increases are necessary to support the operating expenses of the Elevator Program, as current fee levels are not adequate to cover current Program expenses. Additional amendments are also proposed to reorganize the existing fees for permits and inspections into a combined fee schedule to make the fees easier to locate.

Public hearing date: July 8, 2025 (Tumwater/virtual/phone)
Written comments due by: July 8, 2025, 5:00 p.m.
Intended adoption date: September 2, 2025

Additional information about this rulemaking:
CR-102 Proposal
Proposal Language

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Selected 2025 End of Legislative Session Update

The Washington State Legislature concluded with Sine Die (end of session, literal Latin meaning is “without a day”) for this year’s 105 day “long session” which began on Monday, January 13 and ended on Sunday, April 27.

All bills that did not pass in the 2025 Legislative Session will automatically be alive again in the 2026 Legislative Session which begins on Monday, January 12, 2026.

BOMA Opposed bills

1. HB 5814 – applies sales tax to security services: Passed
2. Appling sales tax to Janitorial services: Defeated before it made it in SB 5814
3. HB 1334 Property Tax Limit Increase - Allows for tripling of property tax limit increases from 1% to 3% annually: Defeated
4. SB 5694 Statewide Boiler Operator licensing and certification regulations: Defeated
5. HB 1217/SB 5222 State Authorization of Residential Rent Control, 7% + CPI annual increase limit: Passed
6. HB 1907/SB 5711 Tax on Rents – would designate self-storage as a retail transaction not a lease and therefore subject to the B & O tax and sales tax. Passed

BOMA Supported bill

1. HB 1543 Clean Buildings Compliance - Modifications proposed by Commerce Passed

Legislation of Concern in 2026:

1. All of the above defeated bills in 2025
2. Statewide vacancy tax on commercial real estate, imposing a $5 per square foot tax on properties deemed "vacant" for 182 days in a year.
3. Proposed sales taxes on the collection of rents in CRE
4. Commercial rent control

The Washington State Legislature had a challenging session this year, having started with a budget shortfall projected around $12 billion to $16 billion over the next 4 years. Along with a new Governor who publicly denounced tax proposals from his own Democratic Party, three budgets (Operating, Capital, & Transportation) were negotiated between the Senate and House, and passed out on the in the in final day of this year’s session. They await the Governor’s signature.

During this 2025 legislative session, 431 bills passed the Washington State Legislature (delivered to the Governor).  Rent control, education funding, public safety and transportation funding dominated a lot of debates. 

In his first term as Governor of Washington State, Bob Ferguson navigated a challenging legislative session with a more direct and public role than the former Governor Inslee. He successfully navigated a budget that avoided extreme proposals like the wealth tax, which he threatened to veto, while securing his own priorities like the $100 million to increase law enforcement staffing.

The 2025 legislative session was described by many Legislators as one of the most difficult in recent years, marked by a significant budget shortfall, many new taxes and fee increases, intense debates on key issues like education and public safety, and an increase of civic engagement and opposition to bills. Ferguson, in his first term, navigated the complexities with a focus on fiscal responsibility and bipartisan collaboration.

$77.8 billion Operating Budget

With a total expenditure of $77.8 billion, the budget avoids tapping into the state's emergency reserves and raises $7.4 billion in new tax revenue and nearly $3 billion in spending cuts. Major funding includes $100 million for law enforcement hiring and $4.4 billion to sustain current service levels, with significant investments in education, such as $682 million for K-12 schools. Despite anticipated cuts, such as the delay in expanding the Fair Start for Kids Act, the budget preserves state worker contracts, ensuring no furloughs or bonus alterations which was considered. Utilizing some strategic financial maneuvers, including a pension fund investment adjustment, the plan minimizes immediate fiscal strain while preparing to fund future priorities. Democrats emphasize the budget's role in supporting public education and critical services, while concerns from Republicans were that the tax burden on Washingtonians is too high.

$7.5 billion Capital Budget

The final adopted 2025-27 biennial capital budget, combined with the 2025 Supplemental capital budget, directs a total of $7.5 billion towards public infrastructure and grants across Washington State. This budget emphasizes housing, education, and natural resources, authorizing $4.7 billion in new debt limit bonds and reappropriating $4.9 billion to continue existing projects. Key investments include:

• $975 million for education,
• $827 million for natural resources, and
• $772 million for housing and homelessness.
• $375 million is designated for environmental and energy projects.

The supplemental budget provides $109.1 million in authority adjustment savings and includes $64 million in new bonds for broadband expansion, reaching a total of $114 million, while achieving $73 million in savings from the School Construction Assistance Program. This was a bipartisan budget.

$15.5 billion Transportation Budget

The 2025-27 Biennial Transportation Budget authorizes $15.5 billion in spending, with $9.2 billion designated for capital expenditures and $6.2 billion for operating expenses. Despite new revenue streams, including a 6-cent increase in the state gas tax (raising it from 49.4 cents to 55.4 cents per gallon in July) expected to generate $1.4 billion over six years, and additional vehicle and luxury taxes, some transportation projects are delayed to maintain a balanced four-year financial plan. These new revenues are projected to yield over $3 billion over six years, further supported by a 0.1% sales tax dedication beginning in 2028, contributing $300 million annually. The budget is bolstered by federal funds, nearly $3.3 billion in bond sales, and existing account balances, ensuring balanced transportation accounts over the planning horizon. Additionally, a new bond authorization for the Interstate 5 Bridge Project allows for future toll-based funding.

Highlighted Policy Bills Passed

HB 1217 – Rent Control – Delivered to Governor

• Caps annual rent increases at 7% and prohibits increases during the first 12 months of a tenancy, with exemptions for new construction, nonprofit-owned units, and certain owner-occupied properties.
• Requires 180 days' notice for rent increases of 3% or more, and mandates detailed disclosures for annual rent and fee increases.
• Allows tenants to terminate leases without penalty if rent increases exceed legal limits and prohibits evictions for nonpayment of unlawful rent or fees.
• Limits late fees to a maximum of 5% of rent and restricts move-in fees and security deposits to one month's rent, with exceptions for subsidized housing.
• Establishes a Landlord Resource Center, requires multilingual model lease provisions, and mandates a social impact assessment by 2028.

HB 1096 – Increasing housing options through lot splitting – Delivered to Governor

• Requires cities to establish an administrative approval process for a lot split, which may be combined with concurrent review of a residential building permit for new single-family or middle housing.

Revenue Bills/New Taxes

SB 5794 – Repeal of Tax Exemption Preferences

The legislature states that while some tax preferences (like food sales tax exemptions) help rebalance the tax code for working people, many others resulted from private interests securing preferential treatment. The bill implements recommendations from the Joint Legislative Audit and Review Committee, the Citizen Commission for Performance Measurement of Tax Preferences, and the Department of Revenue.

Key Tax Changes

1. Title Insurance Agent Taxation

• Removed: The bill eliminates title insurance agents from the preferential tax rate that applies to insurance producers, meaning they will no longer qualify for the 0.484% tax rate.

2. Self-Storage Facility Taxation

• Added: Effective April 1, 2026, income from renting or leasing individual storage spaces at self-service storage facilities will be subject to B&O tax at the standard service business rates (1.75% or 1.5% depending on circumstances).
• Added: Clarifies that proceeds from individual storage space rentals or leases for 30 days or longer at self-service storage facilities are not considered "sale of real estate" and thus are not exempt from B&O tax.

4. Repealed Tax Preferences

The bill completely repeals six tax preferences:

• Exclusion of precious metal and monetized bullion from "sale at wholesale" and "sale at retail" definitions
• Credit for light and power businesses and gas distribution businesses
• Credit for new employment in international service activities in eligible areas
• Deduction for interest on investments or loans secured by mortgages or deeds of trust
• Tax on loan interest
• Credit for public safety standards and testing

5. Technical and Administrative Updates

• Updates formatting in multiple sections from spelled-out numbers to numerals (e.g., changing "forty-five" to "45")
• Removes an obsolete reference to tax exemption related to foreign depository agencies
• Updates cross-references throughout the code

Effective Dates

• Most provisions take effect January 1, 2026
• Self-storage facility taxation take effect April 1, 2026
• One section related to newspaper publishing takes effect January 1, 2034
• Another section expires January 1, 2034

Legislative Findings

The legislature notes that:

• Washington currently has 786 tax exemptions resulting in nearly $200 billion in taxpayer savings for the current biennium
• Many exemptions are obsolete due to changes in law or simply not used
• More progress is needed to create a fair tax system that provides sustainable funding for public services

The bill represents an effort to evaluate the tax code and remove inefficient or no longer applicable tax exemptions while clarifying legislative intent for future tax preference reviews.

Sponsor: Senators Salomon, Lovelett, Alvarado, Bateman, Dhingra, Frame, Hasegawa, Nobles, Ramos, Riccelli, Trudeau, Wellman

Status SB:        Delivered to Governor

HB 2082/SB 5813 – Estate Tax Increase & Expansion

This bill makes significant changes to Washington State's tax structure, specifically targeting capital gains tax and estate tax to increase funding for the education legacy trust account.

Capital Gains Tax Changes

1. Additional Capital Gains Tax Rate (Section 101):
   • The bill maintains the existing 7% excise tax on long-term capital assets that began January 1, 2022
   • It adds a new 2.90% additional tax on capital gains exceeding $1,000,000, effective January 1, 2025
   • This creates a tiered system where gains above $1 million are effectively taxed at 9.90% (7% + 2.90%)
   • This change applies to taxes imposed in 2025 for collection in 2026

Estate Tax Changes

1. Increased Exclusion Amount (Section 201):
   • Raises the estate tax exclusion from $2,193,000 to $3,000,000 for estates of decedents dying on or after July 1, 2025
   • Establishes an annual inflation adjustment mechanism based on the consumer price index starting in 2026
   • The adjustment uses October 2024 as the baseline (rather than October 2012)
   • The bill codifies historical exclusion amounts that were previously adjusted for inflation
2. More Progressive Estate Tax Rate Structure (Section 202):
   • Creates a new tax rate table for estates of decedents dying on or after July 1, 2025
   • Increases rates across almost all brackets compared to the previous structure
   • The top tax rate increases from 20% to 35% for estates over $9,000,000
   • Lower brackets also see significant increases:
     • $1-2 million bracket: from 14% to 15%
     • $2-3 million bracket: from 15% to 17%
     • $3-4 million bracket: from 16% to 19%
     • $4-6 million bracket: from 18% to 23%
     • $6-7 million bracket: from 19% to 26%
     • $7-9 million bracket: from 19.5% to 30%
3. Family-Owned Business Interest Deduction (Section 203):
   • Increases the qualified family-owned business interest deduction from $2.5 million to $3 million (aligned with the estate tax exclusion amount)
   • Adds inflation adjustment provisions matching those for the estate tax exclusion
   • Maintains the requirement that family-owned business interests exceed 50% of the estate to qualify

Purpose and Implementation

• The bill explicitly states it aims to make Washington's tax system more progressive, noting it's currently "the second most regressive in the nation"
• The legislature acknowledges the 2024 voter approval (64.11%) to uphold funding for education via capital gains tax
• Revenue from these changes is dedicated to the education legacy trust account to fund K-12 education, early learning, child care, and higher education
• The bill contains an emergency clause making it effective immediately upon signing, though the actual tax provisions have later implementation dates

These changes represent a significant restructuring of Washington's capital gains and estate taxes, creating a more progressive system that increases taxes on higher-value estates and capital gains while providing targeted exemptions for family farms and businesses.

Sponsor: Representatives Street, Thai, Ryu, Ramel, Peterson, Pollet, Parshley, Scott, Reed, Berry, Santos, Macri, Tharinger; Senators Wilson, C., Stanford, Alvarado, Frame, Nobles, Pedersen, Valdez

Status HB:       DEAD – House Finance Committee | NTIB

Status SB:        Delivered to the Governor

HB 2083/SB 5814 – Tax Code Expansions

This bill aims to fund public schools, healthcare, social services, and other programs by modifying certain excise taxes in Washington State. The legislature's stated purpose is to modernize the tax code to better reflect the shift from a goods-based to a service-based economy and to update tobacco product taxation to capture new nicotine products.

Part I: Extending Retail Sales Tax to Select Services

The bill significantly expands services subject to retail sales tax by adding several new categories to RCW 82.04.050(3):

1. Information technology services including:
   • Network operations and support
   • Help desk services
   • Hardware/software training
   • Data entry and processing
2. Custom website development services
3. Investigation and security services including:
   • Background checks
   • Security guard and patrol services
   • Security monitoring services
   • Armored car services
   • Security system services (excluding locksmith services)
4. Temporary staffing services (except for hospitals)
5. Advertising services, including:
   • Creative services (layout, art direction, graphic design)
   • Production services
   • Digital marketing (search engine marketing, lead generation)
   • Online referrals and campaign planning

   Notable exclusions from advertising services:

   • Web hosting and domain registration
   • Services for newspapers
   • Out-of-home advertising (billboards, transit ads, etc.)
6. Live presentations (lectures, seminars, workshops)

The bill also creates an exemption for sales between members of an affiliated group for several of these newly taxable services.

These services will now generally be subject to retail sales tax, with limited exceptions for transactions between affiliated businesses.

HB 2081/SB 5815 – Business & Occupation (B&O) Tax Hike

This bill makes significant changes to Washington's business and occupation (B&O) tax system.

1. B&O Tax Rate Changes (Effective January 1, 2027)

The bill increases various B&O tax rates from their current rates to a uniform 0.5 percent for most business activities, including:

• Extractors: 0.484% → 0.5%
• Manufacturers: 0.484% → 0.5%
• Retailers: 0.471% → 0.5%
• Wholesalers: 0.484% → 0.5%
• Service providers: Various changes with new tiered structure

For contests of chance, the rate increases from 1.5% to 1.8%.

2. Service Business Tax Rate Restructuring (Section 109)

The bill creates a three-tiered structure for service businesses:

• 1.5% for businesses with gross income less than $1,000,000 (unchanged)
• 1.75% for businesses with gross income between $1,000,000 and $5,000,000
• 2.1% for businesses with gross income exceeding $5,000,000 (new highest tier)

3. New Surcharge on High-Grossing Businesses (Effective January 1, 2026)

The bill adds a 0.5% surcharge on businesses with Washington taxable income exceeding $250 million annually. Notable exemptions include:

• Manufacturing activities and related sales
• Income from food, prescription drugs, and certain healthcare items
• Timber industry income
• Petroleum product sales meeting specific conditions
• Fuel transactions
• Agricultural businesses

This surcharge expires December 31, 2029.

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