WA HB2020

Payment card processors may deduct interchange fees, network fees, and portions of fees retained by other processors when calculating their business and occupation (B&O) tax liability

Creates a new 3.1% B&O tax rate for payment card processing activities, higher than the standard 1.75% service rate, effective January 1, 2026

Excludes from the 3.1% rate processors that both operate the payment network (or are affiliated with it) and make payments to an affiliated financial institution; these entities pay the standard rate without the deduction

Specifies that the 1.2% additional tax on specified financial institutions (those with $1 billion+ annual net income) applies to income from payment card processing activities under the new provisions

Legislature explicitly states the act addresses taxation prospectively and no inferences about taxability of prior periods should be drawn from its passage