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, the bill allows for 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. Revenue from this tax will be directed to the education legacy trust account to support various educational initiatives.

The legislation introduces a new chapter in the Washington state tax code, titled the "Financial Intangible Assets Wealth Tax Act," which outlines the tax imposition starting January 1, 2026, and establishes filing requirements and penalties for non-compliance. Key provisions include exemptions for assets already taxed in another state, a process for "innocent spouse relief," and penalties for substantial understatements in asset valuation. The bill clarifies that Title 84 RCW does not apply to this new chapter and includes measures to disregard tax avoidance transactions, emphasizing the legislature's intent to ensure fair tax contributions while maintaining the validity of remaining provisions through a severability clause.

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