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Rep. Noel Frame, lead sponsor of the 2021 capital gains tax. (Noel Frame Photo)

With time running out on the legislative session, Washington state lawmakers approved a $59 billion state budget including a tax on capital gains that has divided the region’s tech community.

The Sunday vote on the capital gains bill, mostly along party lines, primarily targets stock and business ownership sales with a 7% tax for the first time in state history.


“I’ve been working on this for a decade,” she said Sunday afternoon shortly after the bill’s narrow 25-24 vote in the state Senate. “This is a really important step toward progressive tax reform.”

它也将成为一个团体的目标,他们认为资本获得税作为另一个名称所得税。所得税是华盛顿州的违宪。“这是毫无疑问的所得税,”保守党的律师Jason Mercier说Washington Policy Center。“美国国税局认为资本收益税。我们也是。


Frame said she expects nothing less than a full legal attack by the measure’s opponents. But she remains confident the tax will stay on the books because she sees it as an excise tax similar to a sales tax and not an income tax. “I would be deeply surprised if they don’t bring a lawsuit,” she said.

支持者认为税收与国家现有的税收更多商业和职业税which is assessed similarly to an excise tax but based on a business’s gross receipts. And that net revenue essentially is its owners’ income. “Based on (precedent), we feel there is good case law to interpret this as an excise tax,” Frame said.

Broadly, statehouse Democrats see the tax as a way to modify the state’s regressive tax code that relies heavily on fees such as sales taxes which disproportionately affect low-income residents. Republicans view the tax as illegal and unnecessary based on the state’s unexpected economic recovery.

The tax is estimated to raise about $550 million annually starting in fiscal year 2023. The majority of the funds would go toward early education and childcare.

至于那些联邦资本获得税收,您可能已经支付?那些也可能在一个新的东西下Biden administration proposal.



But it is the资产增值税that drew the consistent attention of the tech, business, and legal communities during the legislative session.

Under the tax, the first $250,000 of capital gains would be exempt from the tax, as would specific asset sales. For example, stock sales higher than $250,000 would be taxed at 7%. Real estate would not be.

From the legislative员工分析: “Excluded (from the proposed capital gains tax): all real estate land and structures; assets held in a retirement account; assets transferred as part of a condemnation proceeding; livestock related to farming or ranching; certain types of property used in a trade or business such as machinery and equipment that have been immediately expensed; timber and timberlands; and goodwill received from the sale of a franchised auto.”

一种信件published by the Washington Technology Industry Association, which represents more than 1,000 tech startups and larger companies, warned the tax will “remove a meaningful attraction and retention mechanism” for startups and “harm our competitiveness.”


“Wtia字母的核要求是,采用非凡资本收益的税收将使华盛顿荒自富有初创公司并引导他们在其他地方找到,但这显然是假的,”Hanauer的公民Ventureswrote in response. “Virtually every state that is a leader in high-tech startups — like California, Massachusetts, New York, and Virginia — also has a state tax on capital gains.”

Rahul Sood, CEO of Seattle-area startup Unikrn, called the passing of the bill a “dumb decision.”

The bill also briefly became bogged down over language that prevents opponents of the tax to file a state voter referendum to challenge the measure. That language remained in the final bill, so any challenge of the tax will have come in the form of a lawsuit or the state initiative process.

GOV.Jay Inslee预计将是sign the legislative package在未来三周内。只有在他签署资本增益后,它才能在法庭上受到挑战。“一旦发生这种情况,有人会提出诉讼,”梅蒂尔说。

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