Week 14 WSBPA Legislative Session Report
Legislative Session Update - April 20, 2025
Dear WSBPA Board:
As of Sunday, April 20, 2025, the Washington State Legislature is entering the final week of the 2025 legislative session, with budget and revenue proposals that will impact the state’s bowling industry and the rest of the business community. Lawmakers are finalizing budget and revenue proposals to address a significant shortfall, including potential changes to property taxes, B&O taxes, sales tax prepayment requirements, and beer/wine taxes that could directly impact bowling proprietors. This Week 14 Report also covers updates on employment legislation related to FMLA thresholds and unemployment insurance for striking workers.
State Budget Overview
The 2025 legislative session is approaching its scheduled adjournment with lawmakers working to finalize a budget package that addresses a projected $16 billion shortfall over four years. In response to Governor Ferguson's unwillingness to support a previously proposed "wealth tax," legislative budget writers have unveiled a revised revenue package estimated to raise approximately $12 billion over four years.
Rather than implementing a completely new tax structure, lawmakers have focused on modifying existing tax mechanisms and implementing one-time revenue-generating measures. Several of these proposals advanced significantly during Week 14 and will likely be included in the final budget agreement.
Key Tax Proposals Impacting Bowling Centers
Property Tax Changes (SB 5798)
Current Status: Passed Senate Ways & Means Committee on April 18, 2025.
Proposal Details: This bill would increase the property tax revenue growth limit from the current 1% cap to 3%. The Senate had initially proposed an even larger increase tied to CPI plus inflation, but is now aligning with the House proposal of a fixed 3% cap.
Industry Impact: Bowling proprietors who own their facilities will face higher property tax increases year-over-year, potentially up to three times the current rate. Those who lease space should anticipate landlords passing these increased costs through to tenants via higher lease rates. This represents a significant operational cost increase that will compound annually.
B&O Tax Increases (SB 5815/HB 2081)
SB 5815 was introduced on April 16, 2025, by Senator Rebecca Saldaña and five Democratic co-sponsors, including June Robinson and Noel Frame. The bill is part of a broader revenue package aimed at raising nearly $12 billion over the next four years to fund public schools, higher education, health care, and social services in Washington.
As of April 20, 2025, the bill remains in the Senate Ways & Means Committee, where an executive session was scheduled on April 18, 2025, but no action was taken. This bill is being considered alongside several other tax-related proposals as lawmakers work to finalize the state budget before the legislative session concludes.
The bill proposes increasing the standard B&O tax rate from about 0.47% to 0.5% for retail and other business activities. This means most businesses would pay a bit more in state taxes on their gross receipts.
The bill also targets large corporations, adding a temporary surcharge on businesses with annual revenues over $250 million, as well as higher taxes on big banks and tech companies. However, most small and medium-sized businesses would mainly be affected by the base rate increase.
There is some discussion about increasing the Small Business Tax Credit to help offset the higher taxes for the smallest businesses, but it’s not clear if this will be included in the final version of the bill. If it is, it could help reduce the impact on smaller bowling alleys and other small businesses.
Sales Tax Prepayment Requirement (SB 5814)
Current Status: Passed Senate on April 19, 2025 (27-22 vote); scheduled for House Finance Committee hearing on April 21, 2025.
Proposal Details: Businesses with more than $3 million in annual sales that file monthly sales tax returns will be required to make a one-time prepayment of their June 2027 sales tax by June 25, 2027 (a month early). The prepayment amount will be based on 80% of June 2026 sales. A 10% penalty applies for failing to meet this deadline.
Industry Impact: Larger bowling centers exceeding $3 million in annual sales will face a significant one-time cash flow challenge in June 2027, essentially having to pay nearly two months of sales tax in a single month. Centers that experienced higher sales in June 2026 (potentially during World Cup events) will face an even greater prepayment obligation.
Beer & Wine Tax Increase (HB 2079)
Current Status: House Finance as of April 16; opposition being coordinated through industry coalition.
Proposal Details: This proposal would nearly double the tax on beer (from approximately 48 cents to 96 cents per gallon) and significantly increase wine taxes, putting Washington at a competitive disadvantage compared to neighboring states (California at 20 cents and Oregon at 67 cents per gallon).
Industry Impact: Bowling centers that serve beer and wine would either need to absorb these increased costs (reducing already slim profit margins) or pass them along to customers, potentially reducing alcohol sales and overall revenue.
Employment-Related Legislation
FMLA Small Business Threshold Reduction (HB 1213)
Current Status: On April 19 House concurred in Senate amendments. Passed on the Floor 57-38.
Proposal Details: Lowers the small business exemption threshold for Family and Medical Leave Act (FMLA) compliance from the current 50 employees to:
- 25 employees in 2026
- 15 employees in 2027
- 8 employees in 2028
The bill also corrects implementation errors to ensure state and federal leave programs run concurrently, and modifies how employee counts are calculated.
Industry Impact: Smaller bowling centers will gradually become subject to FMLA requirements over the next three years. This means employers will need to hold positions for employees on leave and continue healthcare benefits during leave (if offered). Managing staffing during employee leave periods will become a greater operational challenge for smaller centers.
Unemployment Insurance for Striking Workers (SB 5041)
Current Status: Passed House with amendments on April 12; likely headed to conference committee.
Proposal Details: Would allow striking workers to receive unemployment benefits, but an amendment reduced eligibility from the originally proposed 26 weeks to just 4 weeks. A two-week waiting period would apply before striking workers could receive benefits.
Timeline and Next Steps
The Legislature is scheduled to adjourn on Sunday, April 27, 2025. Critical dates include:
- April 21-27, 2025: Concurrence and conference committee work to resolve differences between House and Senate versions of bills
- April 27, 2025: Scheduled adjournment of the 2025 legislative session
- Save the date! The next WSBPA GAC check-in call is scheduled for Tuesday, May 6, at 10 am.
If the Legislature fails to reach a budget agreement by the deadline, a special session would be required.
We will continue to monitor these developments closely and provide updates as the session concludes. For specific questions about how these changes might affect your bowling center, please email me at lex@incumbent.com.