Senate and House to enter negotiations on capital gains tax
- Olympia, WA AP
The Washington Senate on Thursday refused to concur with changes the House made to a measure to create a new tax on capital gains, which means lawmakers from each chamber will start negotiations to see if they can reach a deal before the legislative session ends Sunday.
Part of the changes that the Senate rejected was language added by a House committee that says the tax is necessary “for the support of state government and its existing public institutions” — which essentially blocks a voter referendum at the ballot. The version that narrowly passed the Democratic-led Senate last month included an amendment that removed an emergency clause on the bill, which also would have prevented a referendum.
The underlying measure would impose a 7% tax on the sale of stocks, bonds, and other high-end assets in excess of $250,000 for both individuals and couples. A person whose business makes more than $10 million per year is also subject to the tax if they make more than $250,000 in selling the business.
Retirement accounts, real estate, farms and forestry would be exempt from the proposed tax. The measure, which would take effect Jan. 1, is expected to bring in about $450 million a year, according to the most recent fiscal note following changes in the House. House staff estimate about 8,000 households would be affected.
Opponents of a capital gains tax have argued that it’s illegal under state law, and the debate is certain to end up in court if the full Legislature approves it and Gov. Jay Inslee, who supports the tax, signs it into law.