Washington State is one of the few states in the US that does not have a personal income tax. Instead, it relies mainly on sales, property, and business taxes to fund its public services. However, in 2021, the state legislature passed a new law that imposes a 7% tax on the sale or exchange of long-term capital assets, such as stocks, bonds, and business interests, above a $250,000 annual threshold. This tax, which is effective from January 1, 2022, is expected to affect less than 0.25% of the state’s population and generate about $415 million per year for early-childhood education and school construction. The capital gains tax has been a controversial and contested issue in Washington, as it raises questions about its constitutionality, economic impact, and social justice implications. In this paper, I will examine the arguments for and against the capital gains tax, and analyze its potential effects on the state’s economy, society, and fiscal system.
This webcast recording gives an overview of the new Washington State Capital Gains tax which was recently upheld by the Washington State Supreme Court and its implications for taxpayers. Speaker Biographies: Pat Riley, CPA Pat is a Seattle office tax partner with over 30 years of public accounting experience. He focuses on tax planning and compliance services for high-net-worth individuals and their families. His clients have included individuals building their wealth, as well as families with established wealth. Pat has extensive experience helping clients with multinational issues, including the U.S. impacts of being a grantor or beneficiary of a non-U.S. trust, and estate planning where one or both individuals are not U.S. citizens. Prior to joining BDO, Pat was a partner and a Pacific Northwest practice leader for a Big Four firm.
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