WashingtonPrescription drug businesses would face set tax rates while some pharmacies get relief
Beginning January 1, 2027, prescription drug wholesalers and retailers would use set business-tax rates, while qualifying small pharmacies would use a lower rate.
What it does
Businesses that warehouse and resell prescription drugs would pay set tax rates on that income: 0.5 percent in 2027 and 0.35 percent starting in 2028.
Eligible independent pharmacies serving isolated, tribal, high-poverty, or otherwise underserved areas would pay a 0.138 percent tax on retail sales.
Argument forA lower tax rate could help small pharmacies in isolated or underserved areas keep operating and serving local patients.
Argument againstTaxing drug warehousing and resale income could raise operating costs for wholesalers and retailers that handle prescription medicines.
More detail
Drug wholesalers and retailers would pay a business tax on income from warehousing and reselling prescription drugs. The rule covers prescription drugs for human use bought from a manufacturer or wholesaler and resold to retailers, hospitals, clinics, health care providers, or other health care service providers. The business must be registered with the federal Drug Enforcement Administration and licensed by the pharmacy quality assurance commission. The tax rate would be 0.5 percent during calendar year 2027 and 0.35 percent beginning January 1, 2028. The provision would apply beginning January 1, 2027, with the lower rate applying beginning January 1, 2028.
Critical access pharmacies would pay a 0.138 percent business tax on retail sales. The rate covers independent pharmacies that are at least 25 miles from another pharmacy, are the only pharmacy on an island, are operated by a tribe, are the only pharmacy in a high-poverty census tract, or appear on the state health care authority's critical access pharmacy list by July 1, 2026. An independent pharmacy cannot be owned or operated by a subsidiary or affiliate of a large for-profit pharmacy company, a pharmacy benefit manager, or a publicly traded company. The pharmacy must make retail sales to use this rate. The rate would apply beginning January 1, 2027; the list-based eligibility condition includes pharmacies listed on or before July 1, 2026.
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Where it stands
- Introduced
- Passed Senate
- Passed House
- To Governor
- Became Law
Looking ahead
No hearings or votes scheduled.
History
- 2026
- Apr 1Effective date 1/1/2027.Latest
- Apr 1Chapter 265, 2026 Laws.Major
- Apr 1Governor Bob Ferguson signed.Became Law
- Mar 13Delivered to Governor.To Governor
- Mar 12Speaker signed.Major
- Vote recorded Final Passage as Amended by the House (#4). Result: pass.Upper
- Mar 12President signed.Passed House
- Mar 12Passed final passage; yeas, 26; nays, 23; absent, 0; excused, 0.Passed Senate
- Mar 12Senate concurred in House amendments.
- Mar 11Third reading, passed; yeas, 52; nays, 42; absent, 0; excused, 4.Minor
- Vote recorded Final Passage as Amended by the House (#38). Result: pass.Lower
- Mar 11Rules suspended. Placed on Third Reading.Minor
- Mar 11Committee amendment(s) adopted as amended.
- Mar 9Rules Committee relieved of further consideration. Placed on second reading.Minor
- Mar 9Referred to Rules 2 Review.Minor
- Mar 7Minority; do not pass.Minor
- Mar 7FIN - Majority; do pass with amendment(s).Minor
- Mar 7Executive action taken in the House Committee on Finance at 9:00 AM.
- Mar 4Public hearing in the House Committee on Finance at 8:00 AM.
- Mar 3First reading, referred to Finance.Minor
- Feb 28Third reading, passed; yeas, 25; nays, 23; absent, 0; excused, 1.Minor
- Vote recorded 3rd Reading & Final Passage (#24). Result: pass.Upper
- Feb 28Rules suspended. Placed on Third Reading.Minor
- Feb 28Floor amendment(s) adopted.
- Feb 27Placed on second reading by Rules Committee.Minor
- Feb 23Passed to Rules Committee for second reading.
- Feb 23Minority; without recommendation.Minor
- Feb 23Minority; do not pass.Minor
- Feb 19WM - Majority; do pass.Minor
- Feb 19Executive action taken in the Senate Committee on Ways & Means at 4:00 PM.
- Jan 26Public hearing in the Senate Committee on Ways & Means at 4:00 PM.
- Jan 20First reading, referred to Ways & Means.Introduced
Taxes & BudgetHealthcareTransportation