‘A bit shocking’: Businesses looking to leave WA nearly doubled since ‘millionaire tax’ proposal, AWB finds

A survey by the Association of Washington Businesses (AWB) found the number of businesses considering leaving Washington has nearly doubled since the “millionaire tax” was introduced.

Morgan Irwin, the vice president of government affairs with AWB, told “The Jake and Spike Show” the results from the winter quarter survey were “a little bit shocking.”

“One of the trend lines we see out there is people looking to move their business out of Washington. I’m bringing this one up first, because I think sometimes there’s hyperbole around ‘I’m going to take my toys and go home.’ If you’ve got a huge capital expenditure here in Washington, it’s really hard to move, but there are businesses that are more mobile, and so we’ve had 8% to 9% of our respondents over time, saying, ‘Yes, I’m considering moving my business.’ That’s kind of our baseline. That’s jumped to 17%, so it’s doubled. And that’s a troubling trend,” Irwin explained.

44% considering moving residency out of WA

For the first time, AWB asked business owners whether they’re considering changing where they’re domiciled, perhaps keeping their business in Washington but establishing personal residency in another state. That doesn’t mean leaving Washington entirely; spending just 181 days in another state puts you under that state’s tax code instead of Washington’s.

Irwin remarked that the results were “really troubling.”

“So 44% of those asked, or those who responded, said, ‘Yeah, I am looking to personally change my domicile,'” Irwin shared.

He added that the numbers look even worse for border communities like Spokane, where 56% of survey respondents said they were personally looking to move their home.

Taxes now top concern for WA employers

The number one reason? Taxes.

“When we look at trend lines in 2024, when we asked people, ‘What are your top five concerns for your business? Taxes were always in the top five. It was usually number four, behind a couple of other key factors. Here in Washington, it is now number one. So we’re seeing a lot of focus in the employer community in and around taxes, and it is driving their decisions,” Irwin explained.

The Senate Ways and Means Committee voted to advance Senate Bill 6346 earlier this week, which would impose a 9.9% tax on Washington residents with more than $1 million in annual income.

Bill targets more than just millionaires, Irwin warns

Washington Governor Bob Ferguson has argued that millionaires aren’t contributing enough, but Irwin disagrees.

“I wouldn’t agree with his characterization that millionaires are not paying their fair share, and really, the way that this tax is focused, they’re saying it’s going to hit 20,000 households. We don’t have 20,000 households in Washington with one or two W-2 two earners, where you sign the back of the check, you work for somebody else, and you put that in your bank. What we do have is we have a lot of S corporations and LLCs in Washington, where their tax revenue comes through their personal taxes,” he explained.

Therefore, Irwin cautioned that the bill could have broader consequences.

“The way the bill’s structured, it’s not just going after millionaires, it’s going after anybody who’s got a business making any kind of money,” he said.

Watch the full discussion in the video above.

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