Starting July 1, 2025, Washington businesses with unreported investment income may be eligible for penalty and interest relief under the state’s temporary expanded Voluntary Disclosure Program. Created through ESSB 5167, the initiative allows qualifying businesses to report previously unreported revenue subject to the business and occupation (B&O) tax without incurring financial penalties.
The program will be administered in two 10-month phases. Phase 1 runs from July 1, 2025, through April 30, 2026, and Phase 2 from July 1, 2026, through April 30, 2027. This temporary relief also applies to other income reported on the combined excise tax return. However, penalties will still apply to unremitted retail sales tax that was collected.
Eligible participants include registered or unregistered taxpayers with unreported investment income, unless they have been notified of an audit or enforcement action before July 1, 2025. Affiliates of entities under audit may still qualify. Financial institutions and similar businesses defined under RCW 82.04.4281 are excluded from participation.
To learn more or begin the application process, businesses can visit the Washington Department of Revenue website starting July 1, 2025, or email [email protected] for taxability questions.
