The bill seeks to improve funding for public education, child care, early learning, and higher education in Washington State through a revised capital gains tax and estate tax structure. It introduces a new excise tax of 2.90% on long-term capital gains exceeding $1,000,000, effective January 1, 2025. Additionally, the estate tax will see an increase in the top tier rates up to 35% and an elevated exclusion amount of $3,000,000 for estates of decedents dying on or after July 1, 2025. These modifications aim to create a more equitable tax system and provide essential resources for the education legacy trust account, while also addressing the disproportionate tax burden on low-income residents.

The bill further amends existing laws concerning estate taxation, particularly regarding the obligations of qualified heirs and the treatment of family-owned business interests. It establishes that qualified heirs are personally liable for additional taxes unless they secure payment through a bond, and it introduces a lien on property related to qualified family-owned business interests until the tax liability is resolved. The legislation also defines key terms related to estate taxation, sets specific deduction amounts based on the date of death, and clarifies the definitions of family members and employees involved in farming operations. These changes are designed to ensure compliance and protect the state's interests while maintaining existing rights and obligations.

Statutes affected:
Original Bill: 82.87.040, 83.100.048
Substitute Bill: 82.87.040, 83.100.048
Engrossed Substitute: 82.87.040, 83.100.048
Bill as Passed Legislature: 82.87.040, 83.100.048, 83.100.046
Session Law: 82.87.040, 83.100.048, 83.100.046