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2026 Session Review

 

Overview

As we close the 2026 legislative session, I want to extend my sincere appreciation to our Government Affairs Committee, our staff team, and every member who stepped up this year. Your engagement, testimony, and consistent advocacy ensured that hospitality’s voice remained strong and credible throughout one of the most challenging policy environments we’ve seen.

This session, we delivered meaningful wins for operators across Washington. We successfully stopped harmful legislation, including attempts to lower the BAC, impose new taxes on service businesses, enact unworkable scheduling mandates like a 32 hour work week, and layer on duplicative regulatory requirements. We also advanced several pro-hospitality priorities, including funding the statewide tourism office. Additionally, we secured significant engagement from the Governor’s Office and legislative leadership—ensuring hospitality was consistently part of the conversation in budget and policy negotiations.

Supplemental Budget Overview

The final supplemental budget conference report deserves particular attention. There is a $10 billion gap in the budget from truth (how much we know we will spend based on inflation and past spending) to assumption (how much we are budgeting). This budget:

  • Increases spending by close to $2 billion, despite clear signals of slowing economic indicators.
  • Pushes overall state spending to a record $80 billion, the highest in Washington history.
  • Leaves the state with an expected $878 million deficit when lawmakers return next January.
  • Spends nearly $2 billion more in the supplemental budget alone, accelerating long-term fiscal pressures.

Concerning Trends for Employers

There are several serious warning signs for the business community:

  • The state’s economic forecast predicts slowing growth, which runs the risk of pushing spending higher due to increased usage of state assistance programs.
  • It draws down reserves by $880 million, leaving Washington with one of the lowest reserve levels in the country.
  • It does not account for collective bargaining agreements exceeding $4 billion.
  • It relies on one-time revenues to support ongoing programs, creating long-term structural imbalance.
  • It continues reliance on the unconstitutional capital gains income tax, which is still unsettled at the federal level.
  • It anticipates future raids on the LEOFF pension fund, adding risk to long-term commitments.

The Big Takeaway

With spending at record levels and future obligations unfunded, lawmakers will need to increase taxes again next year to sustain this trajectory. This reinforces why our advocacy—focused on tax fairness, predictability, and economic stability—is more important than ever.

Tax and Fiscal Policy

(Oppose) SB 6346: Income Tax – While the bill sets a 9.9 percent tax rate on income above one million dollars, its impact reaches further. It effectively creates the legal and administrative foundation for a state income-tax system in Washington, a shift that could ultimately affect small hospitality businesses, seasonal employers, and tourism-driven economies across the state. Passed

(Oppose) SB 6173: Apple Health Assessment – Would have created a new Apple Health Employer Assessment on large employers whose workers are enrolled in Apple Health, Washington’s Medicaid program. Employers with 100 or more employees in the state could be required to pay an assessment based on the number of employee “member months” enrolled in Medicaid, with payments collected quarterly by the Employment Security Department. Failed

(Oppose) HB 2734: Soda Tax – Would have created a new state tax on sugar-sweetened beverages in Washington. The proposal would impose a $0.03 per fluid ounce tax on beverages containing added caloric sweeteners, beginning January 1, 2028, with the tax applied at the distributor level. Revenue from the tax would be deposited into a “Hunger Free Washington” account to support food security and nutrition programs, including the Supplemental Nutrition Assistance Program (SNAP) and fruit and vegetable incentive programs. Failed

(Oppose) HB 2100: Payroll Expense Tax – Would have established a new state payroll expense excise tax on large employers in Washington. The proposal applies a 5% tax on employee wages above $125,000 per year, tied to the federal Additional Medicare Tax threshold. The tax would apply to businesses with more than 20 employees, more than $5 million in gross receipts, and at least $7 million in total wages, with employers responsible for paying the tax on qualifying payroll expenses. Failed

(Support) HB 2123: Foreign National Reporting – A proposal in the 2026 Washington Legislature (HB 2123) that would have removed certain Public Disclosure Commission (PDC) requirements and state-level statutes related to foreign national participation in elections ultimately failed to advance this year. Sponsors noted that the foreign-national restrictions the bill sought to repeal were already fully governed by federal statute, and the state-mandated PDC certification form added paperwork without providing any additional election-integrity benefits and largely duplicated what federal law already prohibits. Failed

(Support) HB 2334: Adjusting Cash Transactions to Eliminate the Need for Pennies – With the 2025 decision for the US Treasury to no longer mint new pennies, the business community asked for proactive legislation to ensure a standard was in place as their circulation decreases. All cash transactions can be rounded to the nearest nickel. Exact change can still be accepted. In mixed tender transactions, the rounding is only applied to the cash portion of the transaction if necessary. Passed

(Oppose) HB 2611: 32 Hour Work Week – Would have reduced Washington’s standard workweek from 40 hours to 32 hours by changing when overtime pay begins. Under the proposal, employers would be required to pay time-and-a-half for any hours worked beyond 32 in a seven-day workweek, rather than the current 40-hour threshold. The bill would also adjust related employment standards, including requiring one hour of paid sick leave for every 32 hours worked. Failed

(Oppose) HB 2105: Immigrant Worker Protections – Establishes new workplace requirements intended to protect immigrant workers in Washington. The bill requires employers to notify employees within 72 hours if a federal agency requests access to employment eligibility records or conducts an inspection, such as an audit of federal Form I-9 employment verification records. Employers would also need to provide workers with copies of inspection results and information about their rights if issues related to work authorization are identified. WHA supported the intention of the legislation throughout session but changed our position to opposed when the Private Right of Action remained in the policy. A private right of action (PRA) allows individuals to sue businesses directly over statutory violations. While often framed as enhancing consumer rights or constitutional protections, evidence shows that PRAs do not improve enforcement and instead fuel unnecessary, predatory litigation that disproportionately harms small businesses. Passed

(Support) SB 6136: Transparency in Industrial Insurance Rates – Increases transparency in Washington’s workers’ compensation system by requiring the Department of Labor & Industries (L&I) to publicly release the actuarially indicated premium rate for every risk classification each year. It also requires L&I to disclose when it sets a premium rate below the actuarially indicated level, giving employers clearer insight into how rates are determined and helping ensure accountability in the system. Passed

Alcohol

(Oppose) SB 5067 / HB 2362: Concerning Impaired Driving (BAC) – This legislation would have lowered Washington’s legal blood alcohol concentration (BAC) limit from 0.08% to 0.05%. Even though the proposal received more support than in previous years, including backing from the Governor, your team successfully led a broad opposition coalition of hospitality sector businesses and other industries to oppose the bill and prevent its passage this session. Through sustained engagement with lawmakers, member outreach, and coordinated advocacy, the coalition elevated concerns about increased liability for hospitality employees and businesses while emphasizing the need to focus on the drivers responsible for the vast majority of impaired-driving fatalities. While legislative leadership has signaled this issue will return in future sessions, we remain committed to working with policymakers on long-term, evidence-based solutions that meaningfully improve roadway safety. Failed

(Support) SB 6290: Liquor and Cannabis Board Reorganization – This legislation proposed restructuring the Washington State Liquor and Cannabis Board (LCB) by splitting it into two separate regulatory boards, one focused on alcohol and one focused on cannabis, while maintaining shared administrative support. The proposal reflected growing recognition that the current structure must oversee two very different industries with distinct regulatory needs. For the hospitality industry, this was a welcome conversation, as cannabis regulation has understandably taken much of the board’s attention in recent years. Creating a dedicated alcohol-focused board would allow regulators to more directly address the issues facing restaurants, bars, and other alcohol licensees, helping ensure Washington’s alcohol policies evolve to better reflect how the hospitality industry operates today. Failed

(Support) HB 1701: Liquor Licensee Premises – This legislation authorizes multiple liquor licenses to operate within the same facility, even when the building is owned or leased by another licensee or property owner. This change modernizes Washington’s alcohol regulations by allowing shared hospitality spaces, such as food halls, markets, and multi-vendor venues, to operate more easily under separate licenses rather than forcing businesses into outdated regulatory structures. Expect further communications as the rule-making process starts up at the LCB. Passed

Tourism

(Support) HB 2325 / SB 6061: Tourism Self-Assessment – After years of being leading voices for tourism promotion in Washington, your team worked alongside the state tourism agency to secure passage of legislation creating a voluntary, industry-supported tourism self-assessment. This program establishes a framework that allows tourism-related businesses to collectively invest in statewide tourism promotion through an industry-approved assessment, while ensuring those paying into the system have a meaningful voice in how funds are used through oversight and a required industry vote before implementation. The hospitality industry strongly supports this approach because tourism is a critical driver of hotel stays, restaurant visits, and local jobs across Washington, yet the state has fallen behind neighboring destinations that invest significantly in marketing. By empowering the industry to organize and invest in promoting Washington as a destination, this legislation creates a stable, accountable pathway to grow visitor demand and support the small businesses and workers who rely on a strong tourism economy. Passed.

(Oppose) HB 2270: Lodging Tax Revenue – This legislation would have allowed for specified flexibility on the use of lodging tax revenues for small cities. This could have potentially led to certain cities using lodging tax revenues on expenditures that do not relate to tourism promotion. Your team expressed concerns to the prime sponsor, and the bill was pulled from the committee’s calendar. Failed.

(Oppose) HB 2583: Lodging Excise Taxes – This legislation would have expanded and modified local governments’ authority to impose lodging excise taxes (taxes on hotel rooms, short-term rentals, and similar accommodations) to help fund public facilities such as convention centers and performing arts venues. Your team testified in opposition to the bill, and it never moved out of committee. Failed.

(Support) HB 2278: Tourism Promotion Areas – This legislation would have removed the July 1, 2027 expiration date for the additional $3 per night lodging charge used by local tourism promotion areas (TPAs), allowing local legislative bodies to continue the charge beyond 2027 to support tourism promotion. While the bill did not pass this session, it helped elevate the importance of preserving this locally driven investment in attracting visitors. With the sunset approaching, the hospitality industry looks forward to working with lawmakers next session to maintain this proven tool that supports hotels, restaurants, and local economies across Washington. Failed.

Tech and AI

(Oppose) HB 2483: Data Broker Registry – This legislation would have created a state data broker registry, requiring companies that collect or sell personal data to register annually with the Department of Licensing and disclose detailed information about their data practices. While framed as a transparency measure, the proposal represents a first step toward a potential taxation structure. For hospitality businesses, many of which rely on customer data for reservations, loyalty programs, and marketing, the bill raised concerns about new compliance costs, legal uncertainty, and reporting obligations that small businesses may struggle to navigate. The hospitality industry opposed HB 2483 because additional regulatory burdens in Washington’s tech and data space risk increasing operating costs and reducing the state’s competitiveness for businesses already operating on thin margins. Failed

(Oppose) SB 6284: High-Risk Artificial Intelligence – This proposal would have created a new regulatory framework governing the use of “high-risk” artificial intelligence systems, particularly in employment decisions such as hiring and screening applicants. While intended to prevent algorithmic discrimination, the bill included significant compliance requirements and steep penalties for improper use of AI systems. Businesses raised concerns that the definitions of covered systems were broad and could capture widely used hiring tools or software used by small employers. For hospitality businesses, many of which rely on automated scheduling, hiring platforms, and digital applicant screening, these requirements could have increased costs and legal exposure while discouraging the adoption of productivity-enhancing technologies. Failed

(Support) HB 2274 / SB 5976: Modifying Commercial Electronic Mail Act – This legislation updated CEMA by reducing excessive statutory damages and limiting the legal exposure businesses face from technical email marketing violations. In recent years, due to a court ruling, hospitality businesses were faced with increased exposure to lawsuits over routine promotional emails, such as hotel offers or restaurant promotions, where minor formatting issues could trigger significant penalties. Your team supported this reform from partners in the retail industry because it helps curb abusive litigation while still preserving consumer protections against deceptive practices. By bringing balance back to the law, the bill reduces legal uncertainty and compliance costs for all hospitality businesses that rely on email to communicate with guests and fill rooms and tables. Passed

(Oppose) HB 2144: Electronic Employee Monitoring – This legislation would have imposed new notice and liability requirements on employers using electronic monitoring tools to assist with employee performance evaluations, with a broad definition covering technology such as computers, cameras, and phone systems. As drafted, the scope was broad enough that even routine systems used by hospitality businesses, such as digital food safety tracking or electronic order systems that document when and how employees handle food, could potentially be interpreted as monitoring employee performance. That raised concerns about new compliance costs and legal exposure for small businesses already operating on thin margins. The hospitality industry opposed HB 2144 because its broad framework risked burdening employers with complex requirements while creating uncertainty around common technologies used to maintain food safety and operational standards. Failed

(Neutral) HB 2225 / SB 5984: Artificial Intelligence Companion Chatbots – This legislation established regulations for AI companion chatbots, including requirements that chatbots disclose they are not human, implement safeguards for minors, and address harmful or manipulative interactions. Through engagement during the interim on the state’s AI Task Force, your team successfully worked to ensure that customer-service chatbots commonly used by hospitality businesses were explicitly excluded from the bill’s scope, allowing a neutral position. Without this carve-out, many restaurants and hotels could have faced new compliance obligations for simple automated customer service tools. Passed

Environment

(Neutral) SB 5965 / HB 2233: Bag Ban – This legislation would have banned the use of plastic bags (aside from handleless plastic bags for items like soup) in retail settings, including restaurants, and aimed to institute a 12-cent fee on every paper bag used. This would have significantly impacted takeout and delivery operations, which remain essential after the pandemic. Through engagement with lawmakers, your team secured an amendment that would have exempted restaurants from charging the 12-cent pass-through fee on paper bags. Failed.

(Oppose) HB 1420: Extended Producer Responsibility for Textiles – The proposal would have entered producers of textiles into a Producer Responsibility Organization. Our industry would have been considered a “producer” of company uniforms even though we are required by law to provide employees with uniforms. This would have added significant cost and administrative burdens to the industry. Your team worked with the sponsor to remove our industry from the definition of “producer,” but the bill died before language could be secured. The team plans to engage heavily during the interim to address this issue. Failed

(Oppose) SB 6271: Extended Producer Responsibility for Mattresses – This legislation would have entered producers of mattresses into a Producer Responsibility Organization. The bill would have assigned responsibility to brand or trademark owners rather than manufacturers. Other states have adopted existing stewardship programs funded by a small fee on each mattress sold, eliminating burdens on businesses. Your team encouraged lawmakers not to reinvent the wheel if implementing post-consumer mattress management. Failed

(Support) SB 5975: Lead Limits in Cookware – The proposal authorizes the Department of Ecology’s Safer Products for Washington Program to set practical and reliable lead limits in cookware. The program uses an existing funding mechanism and expands Ecology’s ability to gather data from manufacturers to address lead content concerns. This bill helps create a safer Washington without burdening the hospitality industry. Passed.

(Neutral) HB 1607: Bottle Bill – Last session your team worked with lawmakers to secure an amendment exempting the hospitality industry from this bill. The proposal would have required beverage brands to form a Producer Responsibility Organization to fund a 10-cent refund value redemption program for beverage containers. Because of amendments secured previously, the industry would not be impacted by this legislation. Failed.

(Oppose) HB 1735: Foie Gras – As drafted, the bill would have impacted members’ ability to purchase, prepare, and serve duck products. The proposal was another attempt to regulate and ban ingredients, which would detrimentally impact hospitality businesses. Your team worked diligently to stop the bill to protect members from unnecessary state overreach and costly ingredient bans. Failed.

Gaming

(Support) HB 2205 / SB 6137: Regulated Sports Wagering – This legislation updates Washington’s sports wagering framework by allowing wagering on collegiate sports at tribal gaming facilities while maintaining strong integrity protections by prohibiting wagers on individual athlete performance, coaching decisions, or officiating calls. Members helped lead the effort supporting this proposal as the association expands work in the gaming space.

Insurance

(Oppose) SB 5981: 340B Drug Program – The 340B drug pricing program allows certain hospitals and providers to purchase prescription drugs at steep discounts. SB 5981 / HB 2145 expands the program’s use in Washington. While intended to support safety-net providers, studies suggest it can lead to higher claims costs and insurance premiums for employers and employees. Transparency amendments were added during the process, and the governor is expected to sign the bill. Passed

(Oppose) HB 2745: Insurance Premium Tax Increase – House Bill 2745 temporarily raises Washington’s insurance premium tax from 2% to 2.75% for 2026 to fund state health insurance premium assistance and cost-sharing reductions. Although insurers are not supposed to pass the increase directly to employers or enrollees, it increases costs within the market and creates upward pressure on premiums. Failed

(Oppose) HB 2073 / SB 5808: Funding for Health Insurance Premium Assistance – This proposal would have required nonprofit health insurers with reserves deemed “excessive” to transfer a portion to the state to support Exchange premium assistance. Because nonprofit carriers insure many small employers, the bill could indirectly impact employer-sponsored coverage and place upward pressure on premiums. Failed

(Oppose) HB 2487 / SB 5949: Taxes on Insurers – This legislation increases taxes in Washington’s insurance system by narrowing an existing tax exemption and requiring certain vendors serving insurers to pay B&O tax. The costs are likely to be passed through to employers via higher premiums. Passed

Employment

(Support) SB 5936: Preventing Human Trafficking – This proposal would have strengthened Washington’s legal framework for combating human trafficking by expanding civil remedies for victims. Your team secured an amendment ensuring businesses acting in good faith would not be held liable for trafficking occurring on their premises. Failed.