The proposed bill establishes a wealth tax on certain financial intangible assets, such as stocks and bonds, in Washington State, aimed at generating revenue for public schools. The tax rate is set at $5 for every $1,000 of the true and fair value of these assets, with exemptions for retirement savings, college savings, and ownership interests in private companies and partnerships. Additionally, there is an exemption of up to $50,000,000 in true and fair value of taxable financial intangible assets, which is expected to impact around 4,300 residents. The revenue generated will be allocated to the education legacy trust account to support various educational initiatives.

The bill introduces the "Financial Intangible Assets Wealth Tax Act" into the Washington state tax code, detailing administrative provisions such as the requirement for residents to file tax returns by April 15 each year, penalties for late filing, and exemptions for specific financial investments. It also includes a process for "innocent spouse relief" and imposes penalties for substantial tax valuation understatements. The legislation emphasizes a fair tax system, aiming to reduce the burden on low- and middle-income households while ensuring adequate funding for public education. Furthermore, it clarifies that Title 84 RCW does not apply to this new chapter and includes measures to prevent tax avoidance strategies, along with a severability clause to maintain the effectiveness of the remaining provisions if any part is found invalid.

Statutes affected:
Original Bill: 82.32.160, 43.135.034, 84.36.070
Substitute Bill: 82.32.160, 43.135.034, 84.36.070
Engrossed Bill: 82.32.160, 43.135.034, 84.36.070