The 2025 tax package was rushed through at the very end of session, which led to a lot of uncertainty.

As I wrote in December, several bills have been introduced for the 2026 session that would make changes to ESSB 5814 and ESSB 5794, which were part of the 2025 package. Other bills have been introduced since then, including HB 2257, which would clarify various provisions of ESSB 5814. As amended by the House Committee on Finance on Wednesday, HB 2257 would also:

• Specify that live presentations subject to sales tax under ESSB 5814 do not include, for example, classes provided by schools, before and after school care, tutoring, and presentations by nonprofits.
• Exempt from retail sales and use taxes certain services that were defined as retail sales by ESSB 5814, if they are made to K–12 schools, school districts, or educational service districts: information technology; custom website development; live presentations; investigation, security, and armored car services; temporary staffing; and custom software and customization of prewritten software.
• Exempt income from wholesale sales of food and food ingredients from the temporary business and occupation tax surcharge on businesses with more than $250 million in income that was included in ESHB 2081. Wholesale sales of soft drinks, bottled water, and dietary supplements would still be subject to the surcharge.

Additionally, ESSB 5814 applied the sales tax to digital advertising. The provision is being challenged in court on the grounds that it runs afoul of the federal Internet Tax Freedom Act. As introduced, HB 2257 stated that if any part of the definition of advertising services in ESSB 5814 is held invalid, then the entire definition is invalid—it would be the intent of the Legislature to define all advertising as a retail sale. As amended by Finance, HB 2257 no longer includes that provision. (There is no fiscal note for the version of HB 2257 that was approved by Finance.)

Meanwhile, the 2025 tax package also included ESSB 5813, which increased estate tax rates. For example, the top rate was increased from 20% to 35%. ESSB 5813 also finally fixed a long-time problem with the estate tax exclusion amount. The exclusion amount was always supposed to be adjusted for inflation annually, but the specific adjustment in statute had been defunct since 2018. This meant that the exclusion amount was stuck at the 2018 level. ESSB 5813 fixed the glitch. (ESSB 5813 also increased the estate tax deduction for qualified family-owned business interests and extended the deduction for farms to apply to qualified nonfamilial heirs.)

Legislators have now introduced SB 6347 and its companion HB 2725. SB 6347 is scheduled to be heard by the Senate Ways and Means Committee today. The bill would return the estate tax rates to the ones in place before ESSB 5813, for estates of decedents dying on or after April 1, 2026. So, for example, the top rate would revert to 20%.

Importantly, SB 6347 would not undo the inflation-adjustment fix, nor would it repeal the increased deductions for family-owned businesses and nonfamilial farm heirs.

The Department of Revenue estimates that SB 6347 would reduce revenues by $44.8 million in 2025–27 and by $389.9 million in 2027–29. (The fiscal note also states that due to implementation timing, the changes would have to apply to estates of decedents dying on or after July 1, 2026.)