Washington 2025-2026 Regular Session Status: Passed Senate 10 D cosponsors

SB 5576 — Providing state funding for essential affordable housing programs.

Last action — Rules Committee relieved of further consideration. On motion, referred to Ways & Means.

  1. ✓
    Introduced
  2. ✓
    In Committee
  3. 3
    Passed Senate
  4. 4
    Passed House
  5. 5
    To Executive
  6. 6
    Enacted

This bill has passed the Senate. Introduced January 29, 2025. It now moves to the second chamber.

Next likely step: consideration and a floor vote in the House.

Odds of enactment

Moderate chance

Based on the sponsor, cosponsors, and committee posture, this bill has a moderate chance of becoming law.

Upgrade to see the exact probability and what's driving it.

A statistical estimate from our own model of past outcomes — an insight, not a guarantee. Policymaking is volatile.

Prognosis

Advancing 58% · moderate confidence

  • Passed Senate

    Current position in the legislative process.

  • 10 sponsors

    1 primary, 9 co-sponsors signed on.

  • Single-party support

    Sponsorship is currently within one party (10 D).

  • Cleared a recorded vote

    Passed 1 recorded vote so far.

Based on stage, sponsorship breadth, committee status, recorded votes, and cross-state momentum — a description of the observable signals, not a prediction.

Bill Text

What changed in the latest version

268 added · 158 removed

Plain-language change summary

The revised version of SB 5576 now establishes a specific state-level excise tax of six percent on short-term rental sales, whereas the earlier version allowed local governments to implement a tax of up to four percent. This change centralizes funding at the state level and potentially increases the revenue collected for essential affordable housing programs. This matters because it could generate more money, which is crucial for addressing the ongoing affordable housing crisis in Washington.

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ENGROSSED SUBSTITUTE SENATE BILL 5576 State of Washington 69th Legislature 2025 Regular Session By Senate Ways & Means (originally sponsored by Senators Lovelett, Alvarado, Saldaña, Bateman, Salomon, Valdez, Hasegawa, Nobles, C.
S-0858.1 SENATE BILL 5576 State of Washington 69th Legislature 2025 Regular Session By Senators Lovelett, Alvarado, Saldaña, Bateman, Salomon, Valdez, Hasegawa, Nobles, C.
Wilson, and Ramos) READ FIRST TIME 02/28/25.
Wilson, and Ramos Read first time 01/29/25.
AN ACT Relating to providing a local government option for the funding of essential affordable housing programs;
Referred to Committee on Ways & Means.
amending RCW 67.28.181 and 82.14.410;
AN ACT Relating to providing state funding for essential affordable housing programs;
and adding a new section to chapter 82.02 RCW.
amending RCW 67.28.181, 82.14.410, and 82.32.145;
and adding a new chapter to Title 82 RCW.
A new section is added to chapter 82.02 RCW to read as follows:
Beginning January 1, 2026, there is levied and collected a special excise tax of six percent on each retail sale of the furnishing of lodging constituting a short-term rental subject to tax under chapter 82.08 RCW.
(1)(a) The legislative body of a county, city, or town may impose a special excise tax on the sale of or charge made for the furnishing of lodging of short-term rentals subject to tax under chapter 82.08 RCW, as provided in this section.
The revenue collected under this section must be deposited in the essential affordable housing local assistance account created in section 3 of this act.
(b) The tax under this section applies exclusively to the sale of or charge made for the furnishing of lodging of short-term rentals facilitated through a short-term rental platform.
The special excise tax authorized under this section applies exclusively to sales of furnishing of short-term rental lodging facilitated through a short-term rental platform.
(c) The rate of tax under this section is imposed on the sale of, or charge made for, the furnishing of lodging of a short-term rental subject to tax under chapter 82.08 RCW.
NEW SECTION.
The rate of tax may not exceed four percent on the sale of or charge made for the furnishing of lodging of short-term rentals.
Sec.
The rate of tax under this section must not be imposed in increments of less than one percent.
2.
The department shall perform the collection of the tax on behalf of a p.
The definitions in this section apply throughout this chapter unless the context clearly requires otherwise.
1 ESSB 5576 county, city, or town imposing the tax at no cost to the county, city, or town.
(1) "Housing infrastructure" means all costs for the improvements needed in an area necessary to provide services that support the construction and ongoing use of new housing.
(d) Any county ordinance or resolution adopted under this section must contain a provision allowing a credit against the county tax for the full amount of any city or town tax imposed under this section upon the same taxable event.
The variety of services that support the construction and ongoing use of new housing include p.
The legislative authority of any county or any city may impose the tax authorized in this section throughout the county for the county tax and in the corporate limits of the city for the city tax.
1 SB 5576 transportation, water, sewer, stormwater, electricity, broadband, and others as appropriate.
(e) Proceeds from the tax must be deposited in the essential affordable housing local assistance account created in subsection (5) of this section.
(2) "Short-term rental" and "short-term rental platform" have the same meanings as in RCW 64.37.010.
The department must make deposits into the account on a monthly basis on the last business day of the month in which distributions required in subsection (5)(b)(i) of this section are due.
NEW SECTION.
(2)(a) The legislative body of a county, city, or town must adopt a resolution of intent to adopt legislation authorizing the tax under this section before imposing the tax under this section.
Sec.
(b) Adoption of the resolution of intent and legislation requires simple majority approval of the enacting legislative authority.
3.
(3)(a) Except as provided in (b) of this subsection, moneys collected from the special excise tax under this section must be deposited into a separate fund to be used exclusively for the following purposes:
(1) The essential affordable housing local assistance account is hereby created in the state treasury.
(i) Acquiring, rehabilitating, or constructing affordable or workforce housing, which may include new units of affordable housing within an existing structure, or facilities providing supportive housing services;
All receipts from the special excise tax authorized under section 1 of this act must be deposited in the account.
(ii) Funding the operations and maintenance costs of units of affordable, workforce, or supportive housing;
Moneys in the account may be spent only after appropriation.
(iii) Providing rental assistance to tenants;
The state treasurer shall distribute funds in the account on a monthly basis.
or (iv) Funding the operations of social service organizations and nonprofit organizations dedicated to providing services and assistance related to attaining and maintaining housing including, but not limited to, employment assistance, utilities assistance, nutritional assistance, and child care assistance.
A local jurisdiction must use the funds as provided in subsection (2) of this section.
(b) A county, city, or town may retain up to 15 percent of the moneys collected under this section in each calendar year for the direct and indirect costs incurred in the administration of services and programs as provided in (a) of this subsection.
(a) Counties shall receive the special excise tax amounts from the furnishing of lodging of short-term rentals within the unincorporated areas of the county;
and (b) Cities and towns shall receive the special excise tax amounts from the furnishing of lodging of short-term rentals within the incorporated area of the city or town.
(2)(a) Except as provided in (b) of this subsection, expenditures from the account may be used by counties, cities, and towns exclusively for the operating and capital costs of affordable housing programs including, but not limited to, homeless housing assistance, temporary shelters, and other related services, or housing infrastructure projects.
A county, city, or town may use revenues collected under this section for contracts, loans, or grants to nonprofit organizations or public housing authorities for services related to affordable housing programs.
(b) If using the funding collected from the special excise tax under this section for housing infrastructure projects, a county, city, or town must meet the following requirements:
(i) The housing infrastructure project must be designed to meet the maximum allowed density of the parcels it will serve;
(ii) If the county, city, or town imposes impact fees for new development, the county, city, or town must reduce the impact fees by the proportional costs that are paid by the moneys collected from the special excise tax under this section;
(iii) Projects may not be in areas limited only to single-family residential housing;
2 ESSB 5576 (c) A county, city, or town imposing the tax authorized under this section may enter into an interlocal agreement under chapter 39.34 RCW with another county, city, or town, to jointly undertake projects satisfying the requirements of (b) of this subsection.
2 SB 5576 (iv) The county, city, or town must limit the size of any single- family residential unit constructed in the area served by the housing infrastructure project funded, wholly or partially, to 2,000 square feet or less;
(4) Beginning the year after the special excise tax authorized in this section is first collected, a county, city, or town imposing the tax must publish an annual report by March 1st of each year detailing how the revenue from the tax was spent in the prior year.
and (v) If the housing infrastructure project is within an urban growth area designated as the 20-year growth boundary for a city, the city must agree to annex the project area upon completion of the project.
The report must be made available to the public.
(c) A county, city, or town may retain up to 20 percent of the moneys received under this section in each calendar year for the direct and indirect costs incurred in the administration of services and programs as provided in (a) of this subsection.
This may include posting the report on the county's, city's, or town's website.
(3) The definitions in this subsection apply throughout this section unless the context clearly requires otherwise.
(5)(a) The essential affordable housing local assistance account is hereby created in the state treasury.
(a) "Housing infrastructure" means all costs for the improvements needed in an area necessary to provide services that support the construction and ongoing use of new housing.
All proceeds from the tax authorized under this section must be deposited into the account.
The variety of services that support the construction and ongoing use of new housing include transportation, water, sewer, stormwater, electricity, broadband, and others as appropriate.
(b) Moneys in the essential affordable housing local assistance account may be withdrawn only for:
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(i) Distributions to counties, cities, and towns on a monthly basis;
and (ii) Making refunds of taxes imposed under the authority of this section.
(6) A city, town, or county may not impose the tax authorized under this section before April 1, 2026.
(7) All administrative provisions in chapters 82.08, 82.12, and 82.32 RCW, insofar as they are applicable, apply to the local option tax authorized under this section.
(8) For the purposes of this section:
(a) "Operator" has the same meaning as in RCW 64.37.010.
NEW SECTION.
2.
4.
(1) Except as otherwise provided by law and to the extent not inconsistent with this chapter, chapter 82.32 RCW applies to the administration of taxes imposed under this chapter.
(2) The department may adopt rules for administering the tax under this chapter.
Sec.
5.
The rate of tax shall not exceed the lesser of two percent or a rate that, when combined with all other taxes imposed upon sales of lodging within the municipality under this chapter and chapters 36.100, ((67.40,)) 82.08, and 82.14 RCW, equals twelve percent.
The rate of tax shall not exceed the lesser of two percent or a rate that, when combined with all other taxes imposed upon sales of lodging within the municipality under this chapter and chapters 36.100, ((67.40,)) 82.08, and 82.14 RCW, equals ((twelve)) 12 percent.
(2) Notwithstanding subsection (1) of this section:
3 ESSB 5576 (a) If a municipality was authorized to impose taxes under this chapter or RCW 67.40.100 or both with a total rate exceeding four percent before July 27, 1997, such total authorization shall continue through January 31, 1999, and thereafter the municipality may impose a tax under this section at a rate not exceeding the rate actually imposed by the municipality on January 31, 1999.
3 SB 5576 (2) Notwithstanding subsection (1) of this section:
(a) If a municipality was authorized to impose taxes under this chapter or RCW 67.40.100 or both with a total rate exceeding four percent before July 27, 1997, such total authorization shall continue through January 31, 1999, and thereafter the municipality may impose a tax under this section at a rate not exceeding the rate actually imposed by the municipality on January 31, 1999.
(4) In determining the effective combined rate of tax for purposes of the limit in subsections (1) and (2)(c) of this section, the tax rates under RCW 82.14.530 ((is)) and section 1 of this act are not included.
(4) In determining the effective combined rate of tax for purposes of the limit in subsections (1) and (2)(c) of this section, the tax rate under RCW 82.14.530 ((is)) and section 1 of this act are not included.
3.
6.
(a) Twelve percent;
p.
or p.
4 SB 5576 (a) Twelve percent;
4 ESSB 5576 (b) The total sales tax rate that would have applied to the sale of lodging if the sale were made on December 1, 2000.
or (b) The total sales tax rate that would have applied to the sale of lodging if the sale were made on December 1, 2000.
Sec.
7.
RCW 82.32.145 and 2020 c 301 s 6 are each amended to read as follows:
(1) Whenever the department has issued a warrant under RCW 82.32.210 for the collection of unpaid trust fund taxes from a limited liability business entity and that business entity has been terminated, dissolved, or abandoned, or is insolvent, the department may pursue collection of the entity's unpaid trust fund taxes, including penalties and interest on those taxes, against any or all of the responsible individuals.
For purposes of this subsection, "insolvent" means the condition that results when the sum of the entity's debts exceeds the fair market value of its assets.
The department may presume that an entity is insolvent if the entity refuses to disclose to the department the nature of its assets and liabilities.
(2) Personal liability under this section may be imposed for state and local trust fund taxes.
(3)(a) For a responsible individual who is the current or a former chief executive or chief financial officer, liability under this section applies regardless of fault or whether the individual was or should have been aware of the unpaid trust fund tax liability of the limited liability business entity.
p.
5 SB 5576 (b) For any other responsible individual, liability under this section applies only if he or she willfully fails to pay or to cause to be paid to the department the trust fund taxes due from the limited liability business entity.
(4)(a) Except as provided in this subsection (4)(a), a responsible individual who is the current or a former chief executive or chief financial officer is liable under this section only for trust fund tax liability accrued during the period that he or she was the chief executive or chief financial officer.
However, if the responsible individual had the responsibility or duty to remit payment of the limited liability business entity's trust fund taxes to the department during any period of time that the person was not the chief executive or chief financial officer, that individual is also liable for trust fund tax liability that became due during the period that he or she had the duty to remit payment of the limited liability business entity's taxes to the department but was not the chief executive or chief financial officer.
(b) All other responsible individuals are liable under this section only for trust fund tax liability that became due during the period he or she had the responsibility or duty to remit payment of the limited liability business entity's taxes to the department.
(5) Persons described in subsection (3)(b) of this section are exempt from liability under this section in situations where nonpayment of the limited liability business entity's trust fund taxes is due to reasons beyond their control as determined by the department by rule.
(6) Any person having been issued a notice of assessment under this section is entitled to the appeal procedures under RCW 82.32.160, 82.32.170, 82.32.180, 82.32.190, and 82.32.200.
(7) This section does not relieve the limited liability business entity of its trust fund tax liability or otherwise impair other tax collection remedies afforded by law.
(8) Collection authority and procedures prescribed in this chapter apply to collections under this section.
(9) The definitions in this subsection apply throughout this section unless the context clearly requires otherwise.
(a) "Chief executive" means:
The president of a corporation;
or for other entities or organizations other than corporations or if the corporation does not have a president as one of its officers, the p.
6 SB 5576 highest ranking executive manager or administrator in charge of the management of the company or organization.
(b) "Chief financial officer" means:
The treasurer of a corporation;
or for entities or organizations other than corporations or if a corporation does not have a treasurer as one of its officers, the highest senior manager who is responsible for overseeing the financial activities of the entire company or organization.
(c) "Limited liability business entity" means a type of business entity that generally shields its owners from personal liability for the debts, obligations, and liabilities of the entity, or a business entity that is managed or owned in whole or in part by an entity that generally shields its owners from personal liability for the debts, obligations, and liabilities of the entity.
Limited liability business entities include corporations, limited liability companies, limited liability partnerships, trusts, general partnerships and joint ventures in which one or more of the partners or parties are also limited liability business entities, and limited partnerships in which one or more of the general partners are also limited liability business entities.
(d) "Manager" has the same meaning as in RCW 25.15.006.
(e) "Member" has the same meaning as in RCW 25.15.006, except that the term only includes members of member-managed limited liability companies.
(f) "Officer" means any officer or assistant officer of a corporation, including the president, vice president, secretary, and treasurer.
(g)(i) "Responsible individual" includes any current or former officer, manager, member, partner, or trustee of a limited liability business entity with an unpaid tax warrant issued by the department.
(ii) "Responsible individual" also includes any current or former employee or other individual, but only if the individual had the responsibility or duty to remit payment of the limited liability business entity's unpaid trust fund tax liability reflected in a tax warrant issued by the department.
(iii) Whenever any taxpayer has one or more limited liability business entities as a member, manager, or partner, "responsible individual" also includes any current and former officers, members, or managers of the limited liability business entity or entities or of any other limited liability business entity involved directly in the management of the taxpayer.
For purposes of this subsection p.
7 SB 5576 (9)(g)(iii), "taxpayer" means a limited liability business entity with an unpaid tax warrant issued against it by the department.
(h) "Trust fund taxes" means taxes collected from purchasers and held in trust under RCW 82.08.050, including taxes imposed under RCW 82.08.020, 82.08.150, ((and)) 82.51.010, and section 1 of this act.
(i) "Willfully fails to pay or to cause to be paid" means that the failure was the result of an intentional, conscious, and voluntary course of action.
NEW SECTION.
Sec.
8.
Sections 1 through 4 of this act constitute a new chapter in Title 82 RCW.
5 ESSB 5576
8 SB 5576
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Action History

  1. Rules Committee relieved of further consideration. On motion, referred to Ways & Means.

  2. By resolution, reintroduced and retained in present status.

  3. By resolution, returned to Senate Rules Committee for third reading.

  4. Referred to Rules 2 Review.

  5. Minority; without recommendation.

  6. Minority; do not pass.

  7. APP - Majority; do pass with amendment(s) but without amendment(s) by Finance.

  8. Executive action taken in the House Committee on Appropriations at 1:30 PM.

  9. Public hearing in the House Committee on Appropriations at 9:00 AM.

  10. Referred to Appropriations.

  11. Minority; without recommendation.

  12. Minority; do not pass.

  13. FIN - Majority; do pass with amendment(s).

  14. Executive action taken in the House Committee on Finance at 1:30 PM.

  15. Public hearing in the House Committee on Finance at 8:00 AM.

  16. First reading, referred to Finance.

  17. Third reading, passed; yeas, 27; nays, 21; absent, 0; excused, 1.

  18. Rules suspended. Placed on Third Reading.

  19. Floor amendment(s) adopted.

  20. 1st substitute bill substituted (WM 25).

  21. Placed on second reading by Rules Committee.

  22. Passed to Rules Committee for second reading.

  23. Minority; do not pass.

  24. WM - Majority; 1st substitute bill be substituted, do pass.

  25. Executive action taken in the Senate Committee on Ways & Means at 1:30 PM.

  26. Public hearing in the Senate Committee on Ways & Means at 1:30 PM.

  27. First reading, referred to Ways & Means.

Sponsors

Sponsorship breakdown

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1 sponsors · 9 co-sponsors · 141 not signed on · 21 voted No

Sponsors (1)

Co-sponsors (9)

Not signed on (141)

141 members have not signed on to this bill.

Show all 141 →

"Not signed on" means a member has not sponsored or co-sponsored this bill — it does not imply opposition. Members flagged Voted No have a recorded No vote on this bill.

Whip count is in markup. Polling the chamber and every recorded vote this session. Only the first open is slow. It’s instant for you after this. Calling the roll · Tallying · Engrossing

Votes

3rd Reading & Final Passage (#19)

Passed 27 Yea · 21 Nay · 1 Other
Party YeaNayPresentNot Voting
Democrat 27201
Republican 01900
Total 272101
% of votes cast 55%43%0%2%
How each member voted (49)
Member Party Vote
Adrian Cortes Democrat Yea
Annette Cleveland Democrat Yea
Bill Ramos Democrat Yea
Bob Hasegawa Democrat Yea
Claire Wilson Democrat Yea
Claudia Kauffman Democrat Yea
Deborah Krishnadasan Democrat Nay
Derek Stanford Democrat Yea
Drew Hansen Democrat Yea
Emily Alvarado Democrat Yea
Jamie Pedersen Democrat Yea
Javier Valdez Democrat Yea
Jesse Salomon Democrat Yea
Jessica Bateman Democrat Yea
John Lovick Democrat Yea
June Robinson Democrat Yea
Lisa Wellman Democrat Not Voting
Liz Lovelett Democrat Yea
Manka Dhingra Democrat Yea
Marcus Riccelli Democrat Yea
Marko Liias Democrat Nay
Mike Chapman Democrat Yea
Noel Frame Democrat Yea
Rebecca Saldaña Democrat Yea
Sharon Shewmake Democrat Yea
Steve Conway Democrat Yea
T'wina Nobles Democrat Yea
Tina Orwall Democrat Yea
Vandana Slatter Democrat Yea
Yasmin Trudeau Democrat Yea
Chris Gildon Republican Nay
Curtis King Republican Nay
Drew MacEwen Republican Nay
Jeff Holy Republican Nay
Jeff Wilson Republican Nay
Jim McCune Republican Nay
John Braun Republican Nay
Judy Warnick Republican Nay
Keith Goehner Republican Nay
Keith Wagoner Republican Nay
Leonard Christian Republican Nay
Mark Schoesler Republican Nay
Matt Boehnke Republican Nay
Nikki Torres Republican Nay
Paul Harris Republican Nay
Perry Dozier Republican Nay
Phil Fortunato Republican Nay
Ron Muzzall Republican Nay
Shelly Short Republican Nay

Official roll call →

Subjects

housing
Cross-referencing the record. Reading this bill against every other bill in the corpus by meaning, not keywords. Only the first open is slow. It’s instant for you after this. Matching · Ranking · Engrossing

Frequently asked questions

Who sponsors SB 5576?
SB 5576 is sponsored by Claire Wilson (Democrat), T'wina Nobles (Democrat), Bob Hasegawa (Democrat), Jesse Salomon (Democrat), Jessica Bateman (Democrat), Rebecca Saldaña (Democrat), Emily Alvarado (Democrat), Liz Lovelett (Democrat), Javier Valdez (Democrat), and Bill Ramos (Democrat).
What is the current status of SB 5576?
This bill has passed the Senate. Introduced January 29, 2025. It now moves to the second chamber.
Where can I track SB 5576?
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