The Washington State legislature is seriously considering adopting a new Washington State Capital Gains Tax which would be effective starting in 2022. Senate Bill 5096 is headed for the Senate floor and if it passes there, it goes to the House. Things are still quite uncertain, but here are five things we know now:
- The tax is expected to only impact high income taxpayers.
- The tax is intended to raise money for education and provide economic security for low income households.
- The tax is currently being voted on as an excise tax NOT an income tax. We fully expect that classification will be challenged because of our state’s constitutional history with regard to income tax.
- As currently drafted, the tax will apply to long-term capital gains with a high threshold. The exclusion that is under current consideration is $250,000.
- Changes are coming. Not much is certain, except that not much is certain. We are monitoring the situation closely. Bea Nahon, Sweeney Conrad Principal, is on the WSCPA Government Affairs Committee, and we will be providing guidance as it becomes available.
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