WA SB5314

Replaces the business and occupation (B&O) tax credit with a capital gains tax credit beginning in tax year 2025, allowing taxpayers to claim a nonrefundable credit against capital gains tax for amounts also subject to B&O tax on the same sale or exchange

Closes loopholes by adding back long-term capital loss carryovers from exempt sales, non-Washington sales, and pre-2022 transactions when calculating adjusted capital gains, and excludes gains from section 1256 contracts from federal treatment

Requires brokers and barter exchanges to electronically submit IRS Form 1099-B to the Department of Revenue within 90 days of filing with the IRS for long-term capital asset sales allocated to Washington, with a $50 penalty per failure

Creates a new late payment penalty waiver for taxpayers who have timely paid all capital gains taxes for the preceding five years and have not been contacted by the department for enforcement purposes

Changes the inflation adjustment publication schedule from December to October each year, and modifies fund distributions from calendar year to fiscal year basis for the education legacy trust account and common school construction fund