HB 2724 proposes a new tax on Washington residents with annual adjusted gross income of $1 million or more, affecting approximately the top 0.5% of households. The tax revenue would be deposited into the state general fund to support K-12 education, health care, higher education, human services, and the working families' tax credit. Key provisions include exempting sales of family-owned small businesses and real property from the tax, aligning the state definition of taxable income with federal rules (modified for state purposes), and reducing other taxes like sales tax on essential items. The bill aims to make the state tax system less regressive by shifting more burden to high earners while maintaining current tax rates for lower-income residents.
HB 2723 modifies Washington State's tax code by eliminating outdated tax exemptions, specifically targeting 786 existing exemptions that the legislature states have not been updated for a long time and were secured through private interests. The bill directly affects businesses currently benefiting from tax exemptions on machinery and equipment used in manufacturing, testing, or research operations, including gas distribution businesses that will lose their exemption for natural gas production equipment after July 1, 2027. Key provisions include amending tax codes to restrict exemptions for machinery/equipment to specific qualifying uses, requiring documentation for claims, and ending remittance programs for gas businesses starting in 2027. The goal is to increase revenue for the state general fund to support essential services by modernizing the tax code.
HB 2736 reinstates Washington's estate tax rates that were in effect immediately before May 20, 2025, for estates of decedents dying on or after July 1, 2026. It applies these specific tax rates (e.g., 20% on estates over $9 million) to Washington-resident decedents' taxable estates, directly affecting larger estates subject to state taxation. The bill amends RCW 83.100.040 to restore the pre-May 2025 rate structure, which includes stepped tax brackets starting at $0 for estates under $1 million and rising to 20% for estates over $9 million. This change would apply to estates settled after July 1, 2026, but does not affect estates of decedents dying before that date.
HB 2716 restores a tax credit for electric and gas utilities that provide low-income energy assistance, directly affecting these utilities and the low-income households they serve through energy assistance programs. Utilities can claim a 50% tax credit on qualifying contributions (money given to low-income energy assistance programs) and billing discounts (reduced bills for eligible customers) if their spending exceeds 125% of their 2000 levels. The credit is capped at $2.5 million statewide annually, requires annual applications with specific documentation, and expires unused. The bill aims to support existing low-income energy assistance programs by incentivizing utility contributions.
SB 6346 would impose a new tax on Washington households with annual income of $1 million or more, affecting approximately the top 0.5% of earners. Revenue generated would fund K-12 education, health care, higher education, and human services programs. The tax excludes income from selling family-owned businesses and real estate, while also including reductions to sales taxes on essentials like personal care products and business taxes through credits. This policy aims to shift tax burden toward high earners to support public services, as the bill states Washington’s current system is the second most regressive in the nation.
HB 2738 would impose a 9.9% income tax on Washington residents with taxable income exceeding $1 million annually, applying to individuals (not households) with income over this threshold. The tax requires prior passage of a constitutional amendment and would generate revenue to fund public defense programs (7%) and state tax relief initiatives (93%), including sales tax relief and working families' credits. It defines "Washington taxable income" through modifications to federal adjusted gross income, with credits available for taxes paid to other states or business taxes. The bill, referred to the Finance Committee after its first reading on February 19, 2026, remains pending.
HB 2746 reduces Washington State's 2028 property tax levy by $2.1 billion, specifically by lowering the "part I highest lawful levy" amount used in tax calculations for that year. This adjustment directly affects all Washington property owners through the state's property tax system, as it modifies how tax rates are applied to assessed property values. The bill amends existing tax law (RCW 84.52.065) to implement this specific reduction for 2028, while maintaining the $3.60 per $1,000 assessed value cap for future years. It does not change current tax rates or provide immediate relief, only setting a defined reduction for the 2028 tax collection period.
HB 2713 would impose a 1% surcharge on the taxable income from operating private detention facilities in Washington State, effective July 1, 2026. It directly affects operators of such facilities that generate over $1 million in annual Washington gross receipts. The surcharge applies to the portion of income specifically tied to running these facilities, in addition to existing business taxes. This policy change would increase tax obligations for qualifying private detention facility operators without altering the definition of the facilities themselves.
HB 2730 clarifies how Washington state will evaluate whether tax incentives for the aerospace industry remain effective. It requires the Joint Legislative Audit and Review Committee to annually assess aerospace employment in Washington compared to other states using a five-year average of employment data starting in 2029. If Washington’s share of aerospace jobs stays the same or grows relative to other states, the tax incentives will automatically extend until 2040. The bill directly affects aerospace companies receiving tax preferences by tying their continued eligibility to measurable workforce outcomes. It amends a 2013 provision to establish this specific employment-based metric for evaluating the incentives' success.
HB 2742 creates an annual sales and use tax holiday in Washington for qualifying items priced at $500 or less per item. It exempts these items from both sales tax (under RCW 82.08) and use tax (under RCW 82.12) during a four-day period each year, specifically from 12:00 a.m. on the Friday after Thanksgiving through 11:59 p.m. on the Monday after Thanksgiving. The tax holiday directly affects all Washington residents purchasing qualifying items during this window, providing temporary financial relief on everyday goods like clothing, school supplies, or electronics. The Department of Revenue must establish administrative rules and provide taxpayer guidance to implement the holiday, consistent with existing tax agreements.
