Washington Millionaires Tax Passes House After 24-Hour Debate

Washington is one step closer to instituting its first personal income tax after the state house approved a levy on incomes over $1 million.

The bill (S.B. 6346) would institute a 9.9% tax rate on individuals or couples making more than $1 million in a year. Members of the house approved the measure 51-46 Tuesday after more than 24 hours of debate. The state senate passed it 27-22 last month.

The bill will need to be approved again by the senate after the house amended it to ensure the support of Gov. Bob Ferguson (D). The governor had previously shown skepticism about relying on a millionaires’ tax to balance the state’s precarious budget, and opposed earlier drafts of the current bill because he said it didn’t do enough for other Washingtonians.

“I’ve said from the beginning of the discussion around the Millionaires’ Tax: Any bill I sign must send a significant percentage of that revenue back to Washington families and small business owners to make life more affordable,” Ferguson said in a March 6 statement. “I will sign this version of the bill.”

Amendments to the original bill included that 5% of revenue from the tax will go toward early learning programs and subsidized child care, public schools will be exempt from a new state sales tax and sales tax will be removed from an expanded list of products, including diapers and some over-the-counter medications.

The bill also includes several new tax breaks. Businesses making less than $250,000 annually will be exempt from the state’s business and occupation tax, and existing tax credits to offset the business tax will be expanded for service businesses. The bill also significantly expands the working families tax credit, a program designed to support low and moderate income families.

House passage was the income tax bill’s last major hurdle before the end of the legislative session March 13. It could still be challenged in court.