Washington's Senate has advanced a new measure that introduces a 9.9% tax on personal annual incomes exceeding $1 million, a move that could generate approximately $3.7 billion each year. This legislation, known as Senate Bill 6346, marks a significant shift as it is the first personal income tax targeting high-income residents in decades.
With 27 Democratic lawmakers supporting the bill and 22 opposing it, including three Democrats, the proposal has faced criticism from Governor Bob Ferguson. He expressed concerns that the bill does not sufficiently support small businesses and low-income families. Amendments to the bill aim to expand eligibility for a business and occupation (B&O) tax exemption for small businesses.
As the legislative session nears its end, Ferguson emphasized the need to ensure that more revenue benefits hardworking families and small business owners. The measure, which will take effect in two years, also includes tax breaks for low-income residents, while opponents in the tech sector fear it may negatively impact the industry.
In response to previous controversies, lawmakers have amended the bill to repeal a new sales tax expansion on certain services but retained the expansion on advertising services, which is set to begin in 2030.