Removing a tax exemption for the warehousing and reselling of prescription drugs. (REVISED FOR ENGROSSED: Removing a tax exemption for the warehousing and reselling of prescription drugs and providing, the official text

CERTIFICATION OF ENROLLMENT
ENGROSSED SENATE BILL 6228
Chapter 265, Laws of 2026
69TH LEGISLATURE
2026 REGULAR SESSION
BUSINESS AND OCCUPATION TAX—PRESCRIPTION DRUG WAREHOUSING AND RESALE EXEMPTIONS
EFFECTIVE DATE: January 1, 2027
Passed by the Senate March 12, 2026
Yeas 26  Nays 23
DENNY HECK

President of the Senate
Passed by the House March 11, 2026
Yeas 52  Nays 42
LAURIE JINKINS

Speaker of the House of Representatives
CERTIFICATE
I, Sarah Bannister, Secretary of the Senate of the State of Washington, do hereby certify that the attached is ENGROSSED SENATE BILL 6228 as passed by the Senate and the House of Representatives on the dates hereon set forth.
SARAH BANNISTER

Secretary
Secretary
Approved April 1, 2026 9:56 AM
FILED
April 1, 2026

BOB FERGUSON

Governor of the State of Washington
Secretary of State
State of Washington

ENGROSSED SENATE BILL 6228

AS AMENDED BY THE HOUSE
Passed Legislature - 2026 Regular Session
State of Washington
69th Legislature
2026 Regular Session

By Senators Frame, Dhingra, and Hasegawa; by request of Office of Financial Management
Read first time 01/20/26. Referred to Committee on Ways & Means.
AN ACT Relating to removing a tax exemption for the warehousing and reselling of prescription drugs and providing tax relief for critical access pharmacies; amending RCW 82.04.250; reenacting and amending RCW 82.04.280; creating new sections; repealing RCW 82.04.272; and providing an effective date.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:
NEW SECTION.    Sec. 1. The legislature finds that, according to the most recent tax exemption study published by the department of revenue, there are currently 786 tax exemptions for the major state and local tax sources in Washington. A number of these tax exemptions have been unchanged in law for a long time and exist as the result of private interests securing preferential tax treatment. Furthermore, the legislature finds that the state's tax code must be periodically reviewed and updated to ensure that tax policy reflects our modern economy and provides adequate revenue to fund necessary and essential services to support the well-being of Washingtonians. Thus, it is the intent of the legislature to remove a tax preference in order to increase revenue to the state's general fund to maintain essential state services.
Sec. 2. RCW 82.04.280 and 2025 c 423 s 202, 2025 c 420 s 107, and 2025 c 9 s 2 are each reenacted and amended to read as follows:
(1) Upon every person engaging within this state in the business of: (a) Printing materials other than newspapers, and of publishing periodicals or magazines; (b) building, repairing or improving any street, place, road, highway, easement, right-of-way, mass public transportation terminal or parking facility, bridge, tunnel, or trestle which is owned by a municipal corporation or political subdivision of the state or by the United States and which is used or to be used, primarily for foot or vehicular traffic including mass transportation vehicles of any kind and including any readjustment, reconstruction or relocation of the facilities of any public, private or cooperatively owned utility or railroad in the course of such building, repairing or improving, the cost of which readjustment, reconstruction, or relocation, is the responsibility of the public authority whose street, place, road, highway, easement, right-of-way, mass public transportation terminal or parking facility, bridge, tunnel, or trestle is being built, repaired or improved; (c) extracting for hire or processing for hire, except persons taxable as extractors for hire or processors for hire under another section of this chapter; (d) operating a cold storage warehouse or storage warehouse, but not including the rental of cold storage lockers; (e) representing and performing services for fire or casualty insurance companies as an independent resident managing general agent licensed under the provisions of chapter 48.17 RCW; (f) engaging in activities which bring a person within the definition of consumer contained in RCW 82.04.190(6); and (g) during calendar year 2027, warehousing and reselling drugs for human use pursuant to a prescription; as to such persons, the amount of tax on such business is equal to the gross income of the business multiplied by the rate of 0.5 percent.
(2) Beginning January 1, 2028, upon every person engaging within this state in the business of warehousing and reselling drugs for human use pursuant to a prescription, as to such persons, the amount of tax on such business is equal to the gross income of the business multiplied by the rate of 0.35 percent.
(3) For the purposes of this section, the following definitions apply unless the context clearly requires otherwise.
(a) "Cold storage warehouse" means a storage warehouse used to store fresh and/or frozen perishable fruits or vegetables, meat, seafood, dairy products, or fowl, or any combination thereof, at a desired temperature to maintain the quality of the product for orderly marketing.
(b) "Drug" has the same meaning as in RCW 82.08.0281.
(c) "Storage warehouse" means a building or structure, or any part thereof, in which goods, wares, or merchandise are received for storage for compensation, except field warehouses, fruit warehouses, fruit packing plants, warehouses licensed under chapter 22.09 RCW, public garages storing automobiles, railroad freight sheds, docks and wharves, and "self-storage" or "mini storage" facilities whereby customers have direct access to individual storage areas by separate entrance. (("Storage warehouse" does not include a building or structure, or that part of such building or structure, in which an activity taxable under RCW 82.04.272 is conducted.
(c) ))(d) "Periodical or magazine" means a printed publication, other than a newspaper, issued regularly at stated intervals at least once every three months, including any supplement or special edition of the publication.
(e) "Prescription" has the same meaning as in RCW 82.08.0281.
(f) "Warehousing and reselling drugs for human use pursuant to a prescription" means the buying of drugs for human use pursuant to a prescription from a manufacturer or another wholesaler and reselling of the drugs to persons selling at retail or to hospitals, clinics, health care providers, or other providers of health care services by a wholesaler or retailer who is registered with the federal drug enforcement administration and licensed by the pharmacy quality assurance commission.
Sec. 3. RCW 82.04.250 and 2025 c 420 s 103 are each amended to read as follows:
(1) Upon every person engaging within this state in the business of making sales at retail, except persons taxable as retailers under other provisions of this chapter, as to such persons, the amount of tax with respect to such business is equal to the gross proceeds of sales of the business, multiplied by the rate of 0.5 percent.
(2) Upon every person engaging within this state in the business of making sales at retail that are exempt from the tax imposed under chapter 82.08 RCW by reason of RCW 82.08.0261, 82.08.0262, or 82.08.0263, except persons taxable under RCW 82.04.260(11) or subsection (3) of this section, as to such persons, the amount of tax with respect to such business is equal to the gross proceeds of sales of the business, multiplied by the rate of 0.5 percent.
(3)(a) Until July 1, 2040, upon every person classified by the federal aviation administration as a federal aviation regulation part 145 certificated repair station and that is engaging within this state in the business of making sales at retail that are exempt from the tax imposed under chapter 82.08 RCW by reason of RCW 82.08.0261, 82.08.0262, or 82.08.0263, as to such persons, the amount of tax with respect to such business is equal to the gross proceeds of sales of the business, multiplied by the rate of .2904 percent.
(b) A person reporting under the tax rate provided in this subsection (3) must file a complete annual report with the department under RCW 82.32.534.
(4) Upon every person engaging within this state in business as a critical access pharmacy making sales at retail; as to such persons, the amount of the tax with respect to such business is equal to the gross income of the business multiplied by the rate of 0.138 percent.
(5) For purposes of this section, the following definitions apply:
(a) "Critical access pharmacy" means an independent pharmacy that:
(i) Is farther than a 25 mile radius from any other pharmacy;
(ii) Is the only pharmacy on an island;
(iii) Is operated by a tribe as defined in RCW 43.71B.010;
(iv) Is the only pharmacy located in a high poverty census tract as defined by the United States census bureau; or
(v) Is a pharmacy listed on the health care authority's critical access pharmacy list on or before July 1, 2026.
(b) "Independent pharmacy" means a pharmacy as defined in RCW 18.64.011 that is not owned or operated by a subsidiary or affiliate of a for-profit entity with more than 10 pharmacy locations nationwide, a pharmacy benefit manager, or a publicly traded entity.
NEW SECTION.    Sec. 4. RCW 82.04.272 (Tax on warehousing and reselling prescription drugs) and 2013 c 19 s 127, 2003 c 168 s 401, & 1998 c 343 s 1 are each repealed.
NEW SECTION.    Sec. 5. RCW 82.32.805 and 82.32.808 do not apply to this act.
NEW SECTION.    Sec. 6. This act takes effect January 1, 2027.
Passed by the Senate March 12, 2026.
Passed by the House March 11, 2026.
Approved by the Governor April 1, 2026.
Filed in Office of Secretary of State April 1, 2026.