Senate Bills
SB 5794. Adopting recommendations from the tax preference performance review process, eliminating obsolete tax preferences, clarifying legislative intent, and addressing changes in constitutional law.
- Repeals, modifies, or clarifies the legislative intent of certain tax preferences.
- Includes airport excise tax, brokered natural gas tax, business and occupation tax, hazardous substance tax, insurance premium tax, leasehold excise tax, oil spill response and administration taxes, petroleum products processing tax, property tax, public utility tax, real estate excise tax, retail sales and use tax, soft drinks syrup tax, South Dakota v. Wayfair, Inc. et al. Decision, Nexus, tax preferences (*very* long list of industries; see bill summary).
- Public hearing in Ways & Means was on March 31.
SB 5795. Reducing the state sales and use tax rate.
- Reduces state sales tax from 6.5% to 6.0%
- Decreases state revenue but increases local revenue.
- Public hearing in Ways & Means was on March 31.
SB 5796. Enacting an excise tax on large employers on the amount of payroll expenses above the social security wage threshold to fund programs and services to benefit Washingtonians. Fact sheet here.
- Wealthy corporations do not pay payroll taxes for social program, like Washington’s popular Paid Family and Medical Leave program, on employee salaries above $176,100. Closing this loophole could provide roughly $4 billion for Washington’s social safety programs.
- Public hearing in Ways & Means was on March 31.
SB 5797. Enacting a tax on stocks, bonds, and other financial intangible assets for the benefit of public schools. See also HB 2046 below. Fact sheet here.
- To fund a bright future for every student, we can enact a small tax paid only by people with Wall Street wealth in excess of $50 million. This would raise several billion dollars per year for our public schools, special education services, and the educators that are shaping the next generation.
- Public hearing in Ways & Means was on March 31.
SB 5798. Concerning property tax reform.
- Increases the annual property tax growth limit for state and local property taxes to the great of 100 percent plus inflation and population change or 101 percent.
- Exempts property owners qualifying under the Retired Persons Property Tax Relief program from 100 percent of part one of the state levy.
- Requires property tax statements to list the state property tax as the state school levy.
- Public hearing in Ways & Means was on March 31.
House bills
HB 2045 Surcharge on High-Grossing Corporations and Financial Institutions.
- Imposes a 1% Business & Occupation (B&O) tax surcharge on businesses with taxable income over $250 million. This modest surcharge only applies to the wealthiest corporations—approximately 400 businesses statewide—ensuring that small businesses and working families remain unaffected.
- The bill also includes an increase to the surcharge on specified financial institutions (approximately 200) with annual net income of $1 billion or more from 1.2% to 1.9%.
- Under this proposal, Washington will generate nearly $600 million in fiscal year 2026 and nearly $2 billion in fiscal year 2027, ensuring a revenue stream will shield essential public services from economic downturns and political uncertainty, creating a more stable and sustainable financial future for the state.
- Public hearing held in the House Committee on Finance on April 3.
HB 2046 Property Tax Fairness Through Financial Intangible Assets Tax
- A Financial Intangible Assets Tax (FIT), imposes a property tax of $8 on every $1000 of assessed value on certain financial intangible assets, such as stocks, bonds, mutual funds, and index funds, with the first $50 million in assessed value exempt from the tax to best ensure tax fairness. Other exemptions include pensions, retirement accounts, and education savings accounts.
- The Department of Revenue estimates around 4,300 wealthy Washingtonians will pay the tax, generating approximately $2 billion per year, beginning in fiscal year 2027, which will be dedicated to the Education Legacy Trust Account to support Washington families and fund vital investments in K-12 schools.
- This version of a tax on financial intangibles is has some different provisions than the Senate version and raises less money. We are signing in PRO on both, leaving the final design to the budget reconciliation process.
- Public hearing held in the House Committee on Finance on April 3.
HB 2049 Increasing State and Local Flexibility to Fund Schools and Public Safety
- Invests in the state’s paramount duty to fund K-12 education and build strong and safe communities, modifies the state and local property tax authority and adjust the school funding formula.
- The bill maintains the 1 percent cap on property tax growth but allows for increases based on inflation and population changes, not to exceed 3 percent.
- The bill also adjusts levy equalization methods to ensure equitable funding for historically underinvested areas of our state, including rural school districts, mitigating widening funding gaps between schools.
- The Department of Revenue estimates the change will increase funding for state investment in K-12 schools by $50 million in fiscal year 2026 and $150 million in fiscal year 2027.
- Public hearing held in the House Committee on Finance on April 3.