What To Know About Washington’s New Income Tax Starting In 2028

In 1932 Washington state voters approved a state income tax which was later declared unconstitutional and from that point on, Washington state has not had an income tax all the way up until this year. 

Wait a minute I take that back technically Washington states income tax won’t kick in for another two years.  

What will this pay for? 

At that point, anyone in Washington state earning more than $1 million annually will pay a 9.9% income tax to the state. The best estimation is that it will add somewhere between 3 and $3.5 billion to the state’s checkbook. That money will be spent on a number of things. Probably the most notable is K through 12 education. 

Now legislators are saying, yes, that tax will kick in in 2028, but there are other taxes that we raised last year that we’ve decided to drop back down. 

According to axios.com,
‘Washington lawmakers made big headlines last month by passing a new income tax, but they also rolled back a few taxes they approved last year, including a big estate tax hike.
The new income tax has drawn criticism that it could hurt the state’s business climate or push wealth out of state — outcomes the tax rollbacks aim to help prevent.
Senate Bill 6347 lowers the top estate tax rate in Washington from 35% to 20%, undoing an increase imposed last year. The estate tax applies to property transfers when someone dies.’ 

When the Washington state legislature passed the income tax bill they also repealed or rolled backs sales taxes on items like information technology support, website development, temporary staffing and live presentations.

So, when do the tax reductions kick in? 

Sales tax reductions on services will kick in January 2029, And revised estate taxes. Rates will kick in in July of this year.