Rep. Jim Walsh has introduced House Bill 2121, a measure to reverse the state sales-tax expansion that is now hitting Washington’s public schools and nonprofits.

“The disastrous state sales tax hike created by the horrible Senate Bill 5814 has hurt public schools all around Washington,” said Walsh, R-Aberdeen. “That tax hike, which the current governor eagerly signed into law, was so poorly designed that it was full of errors and what even tax-and-spend Democrats have called unintended consequences.

“One of those unintended consequences is that this new tax forces public schools and nonprofit organizations like food banks to pay sales taxes to Olympia that they’ve never had to pay in our state’s history.”

HB 2121 would exempt public schools and specific nonprofits from paying sales and use taxes on a broad range of contracted services, including technology support, web development, communications and training — services newly taxed under SB 5814.

“My bill fixes that mess,” Walsh added. “It’s narrowly drafted to exempt public schools and a few other nonprofit organizations from this crushing sales-tax burden.”

School districts and nonprofits say the expanded service tax has diverted money away from classrooms and community programs, adding unexpected costs to already strained budgets.

“Hopefully, if everyone in Olympia can agree to stop inflicting damage on and pulling dollars out of our K-12 classrooms, we can build together from this point to fix the state’s larger budget and tax problems,” Walsh said.

Walsh said HB 2121 addresses the immediate harm created by Senate Bill 5814, but is just a first step, as it won’t solve the state’s broader fiscal challenges.

“Of course, in the long run, I’d like to exempt everyone from this crushing tax burden,” he said. “The people — and now the schools — of Washington are overtaxed. Olympia is increasing state government spending at an unsustainable pace. We need major budgetary and fiscal reform at the Capitol. HB 2121 is just one small step in that direction.”

The 2026 legislative session begins on Jan. 12.