WashingtonWashington would tax individual income above a million-dollar deduction
Starting in 2028, individuals would face a 9.90 percent Washington tax after a $1 million deduction, while later provisions would change several consumer and business taxes.
What it does
Starting in 2028, individuals would pay 9.90 percent on Washington taxable income after a $1 million standard deduction, with credits and exemptions for specified income and taxes.
Tax revenue would support public services and tax relief, including refundable help for eligible working families, exemptions for basic household products, and larger credits for some businesses.
Beginning in 2029, sales and use taxes would not apply to basic hygiene products, diapers, and over-the-counter drugs, while additional services and activities would be taxed under expanded definitions.
Argument forThe measure could provide more funding for schools, health care, and child care while reducing some taxes on basic products and working families.
Argument againstA 9.90 percent tax and expanded service taxes could increase tax bills and recordkeeping for affected individuals, businesses, and customers.
More detail
Washington would impose a 9.90 percent tax on an individual's Washington taxable income. Residents would be taxed on income from all sources, while nonresidents would be taxed on income from Washington sources. Individuals with negative Washington taxable income would owe no tax under this chapter. A taxpayer could claim certain credits for income taxes paid elsewhere, business and public utility taxes, Washington capital gains taxes, and pass-through entity taxes. An individual could deduct $1 million from Washington base income, with a reduced deduction for nonresidents who were not residents for the full year. Income protected from taxation by federal law, tribal law, or other listed exemptions would remain excluded. The tax would apply beginning January 1, 2028. Estimated payments would not be required before July 1, 2029.
The state would direct tax revenue to sales and use tax relief, the working families' tax credit, business tax relief, and public services. The provisions cover eligible low-income working families, consumers buying listed household products, and qualifying small businesses and other businesses subject to the state business tax. The working families' credit would remain limited to people who meet the program's income, residency, filing, and other eligibility rules. Five percent of revenue from the individual income tax would go to the Fair Start for Kids account each year beginning July 1, 2029. The business tax credit amounts would depend on the taxpayer's reporting category and the tax otherwise due. The revenue distribution would begin when the tax is collected. The Fair Start for Kids transfer would begin July 1, 2029, and the listed sales and business tax relief would generally begin January 1, 2029.
The state would exempt specified household products from sales and use tax and would apply sales tax to additional listed services and activities. The exemptions cover grooming and hygiene products, diapers, and labeled over-the-counter drugs. The service-tax rules cover listed business, personal, digital, recreational, and live-presentation services, subject to stated exclusions. Businesses selling exempt products or services to qualifying public schools, libraries, and related entities would need exemption certificates when required. The text includes exceptions for educational institutions, health care, nonprofit organizations, affiliated businesses, and other listed activities. A business tax surcharge on Washington taxable income above $250 million would apply through December 31, 2029, with multiple industry exemptions. The listed sales and use tax exemptions would begin January 1, 2029. The broader service-tax definitions would take effect January 1, 2029, while certain clarifying provisions would take effect July 1, 2026.
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Where it stands
- Introduced
- Passed Senate
- Passed House
- To Governor
- Became Law
Looking ahead
No hearings or votes scheduled.
History
- 2026
- Mar 30Effective date 6/11/2026*.Latest
- Mar 30Chapter 238, 2026 Laws.Major
- Mar 30Governor Bob Ferguson signed.Became Law
- Mar 13Delivered to Governor.To Governor
- Mar 12Speaker signed.Major
- Mar 12President signed.Passed House
- Mar 11Passed final passage; yeas, 27; nays, 21; absent, 0; excused, 1.Passed Senate
- Vote recorded Concur in House amendment(s) (#13). Result: pass.Upper
- Vote recorded Final Passage As Amended by the House (#14). Result: pass.Upper
- Mar 11Senate concurred in House amendments.
- Mar 9Third reading, passed; yeas, 51; nays, 46; absent, 0; excused, 1.Minor
- Vote recorded 2549 Manjarrez Pg 3 Ln 12 (#21). Result: fail.Lower
- Vote recorded 2578 Walsh Pg 1 Ln 3 (#18). Result: fail.Lower
- Vote recorded 2579 Abbarno Pg 43 Ln 2 (#60). Result: fail.Lower
- Vote recorded 2561 Keaton Pg 43 Ln 2 (#59). Result: fail.Lower
- Vote recorded 2603 Reeves Pg 13 Ln 20 (#54). Result: fail.Lower
- Vote recorded 2580 Chase Pg 69 Ln 20 (#65). Result: fail.Lower
- Vote recorded 2612 Reeves Pg 5 Ln 33 (#58). Result: fail.Lower
- Vote recorded Postpone Indefinitely (#17). Result: fail.Lower
- Vote recorded 2590 Penner Pg 12 Ln 19 (#47). Result: fail.Lower
- Vote recorded 2581 McClintock Pg 69 Ln 20 (#66). Result: fail.Lower
- Vote recorded 2542 Marshall Pg 106 Ln 13 (#74). Result: fail.Lower
- Vote recorded 2556 Valdez Pg 64 Ln 36 (#62). Result: fail.Lower
- Vote recorded 2614 Reeves Pg 5 Ln 33 (#37). Result: fail.Lower
- Vote recorded 2608 Reeves Pg 69 Ln 21 (#68). Result: fail.Lower
- Vote recorded 2544 Graham Pg 43 Ln 2 (#57). Result: fail.Lower
- Vote recorded 2610 Reeves Pg 69 Ln 21 (#70). Result: fail.Lower
- Vote recorded 2575 Connors Pg 12 Ln 18 (#46). Result: fail.Lower
- Vote recorded 2545 Barnard Pg 11 Ln 16 (#45). Result: fail.Lower
- Mar 9Rules suspended. Placed on Third Reading.Minor
- Mar 9Floor amendment(s) adopted.
- Mar 9Committee amendment not adopted.Minor
- Mar 6Rules Committee relieved of further consideration. Placed on second reading.Minor
- Mar 2Referred to Rules 2 Review.Minor
- Feb 27Minority; without recommendation.Minor
- Feb 27Minority; do not pass.Minor
- Feb 27FIN - Majority; do pass with amendment(s).Minor
- Feb 27Executive action taken in the House Committee on Finance at 8:00 AM.
- Feb 24Public hearing in the House Committee on Finance at 8:00 AM.
- Feb 17First reading, referred to Finance.Minor
- Feb 16Third reading, passed; yeas, 27; nays, 22; absent, 0; excused, 0.Minor
- Feb 16Rules suspended. Placed on Third Reading.Minor
- Feb 16Floor amendment(s) adopted.
- Feb 161st substitute bill substituted (WM 26).Major
- Feb 12Placed on second reading by Rules Committee.Minor
- Feb 9Passed to Rules Committee for second reading.
- Feb 9Minority; without recommendation.Minor
- Feb 9Minority; do not pass.Minor
- Feb 9WM - Majority; 1st substitute bill be substituted, do pass.Major
- Feb 9Executive action taken in the Senate Committee on Ways & Means at 10:30 AM.
- Feb 6Public hearing in the Senate Committee on Ways & Means at 1:30 PM.
- Feb 4First reading, referred to Ways & Means.Introduced
Taxes & BudgetEducationHealthcare