Rep. Davis, Sen. Carlyle introduce bills to close pharmaceutical warehouse distributor tax loophole, fund addiction recovery

Rep. Lauren Davis, D-32

Olympia— Rep. Lauren Davis (D-Shoreline) and Sen. Reuven Carlyle (D-Seattle) introduced House Bill 2091and Senate Bill 5952, respectively, this week to fund addiction recovery services by closing the pharmaceutical warehouse distributor tax loophole.

The business case that led to the creation of a special tax preference for pharmaceutical warehouse distributors was remedied several years ago, yet the tax break remains on the books.

Closing this tax loophole will raise about $20 million per year.

“The case to continue the drug warehousing tax exemption simply does not stand up to rigorous, data-driven analysis. 

"During a time of profound disequilibrium – underscored by the fallout from the pandemic and the opioid crisis – it’s clearer than ever the time has come to close this unjustified and outdated tax loophole. 

"This legislation represents a meaningful opportunity to move the ball forward on the opioid epidemic and elevate the quality of life of real people living real lives,” said Carlyle.

The substance use disorder continuum of care includes three distinct parts: outreach, treatment, and recovery support. The state’s investment in addiction services has historically focused on treatment. 

Outreach and recovery support services are critical to engaging individuals with substance use disorder treatment and helping them remain in recovery after treatment completion. However, because neither outreach nor recovery support services are insurance billable, there is little funding for them.

“The overwhelming majority of people with substance use disorder want help, but only one in ten receive it. Outreach services help to close that delta by engaging people with untreated addiction in emergency departments, jails, and homeless encampments. 

"It is also imperative that we fund recovery support services like recovery housing and employment pathways, which are strong predictors of long-term recovery. We cannot continue to fund one leg of a three-legged stool and wonder why people are dying,” said Davis.

Rep. Lauren Davis, D-Shoreline (32nd Legislative District), represents part of King and Snohomish Counties, including Lynnwood, Mountlake Terrace, Shoreline and part of Edmonds.