Washington Senate narrowly approves capital gains tax
A 7% tax on capital gains is one step closer to the governor’s desk after winning approval in a divided state Senate on Saturday. The measure passed on a 25-24 vote.
The controversial — and many argue illegal — tax cleared the Senate after an hours long debate Saturday, and multiple failed amendments from Republicans who strongly opposed the bill.
“Legislatures have been trying to impose an income tax since 1934, and the voters in the state have been rejecting it,” said Republican Judy Warnick.
But supporters like Democrat Patty Kuderer say it’s desperately needed.
“Washington is rated dead last in terms of tax equity,” she said.
One big win for the opposition was an approved amendment from Democrat Steve Hobbes that stripped out an emergency clause, which would have prevented a voter referendum.
Sponsored by Democratic Sen. June Robinson, SB 5096 originally would have been a 9% tax on gains from the sale of things such as stocks, bonds, and other assets above $25,000 for individuals, and $50,000 for couples. That would have affected about 42,000 taxpayers and brought in about $975 million in the first year, according to the OFM.
When the bill cleared the Ways and Means committee last month, it was reduced to 7% tax on gains of $250,000 for individual and joint filers, along with several other changes, such as excluding the sale of all real estate and creating an exclusion for a “qualified family-owned small business.”
KIRO Radio’s Hanna Scott contributed to this report.