WA HB2089

Removes the "located in more than ten states" language from the business and occupation tax deduction for mortgage loan interest, effectively narrowing eligibility to align with the federal definition of community banks (those with $10 billion or fewer in assets)

Directs new tax revenue generated by this change to the wildfire response, forest restoration, and community resilience account, which had its funding reduced by 50% at the start of the 2025-2027 biennium

Requires the Department of Revenue to estimate increased general fund revenue by October 15th annually starting in 2027, with the state treasurer transferring those amounts to the wildfire account by November 1st

Addresses a 2024 finding that 65% of the tax preference benefits ($91.6 million of $141 million in 2023) went to large financial institutions rather than the community lenders originally intended

Takes effect July 1, 2026