The bill seeks to improve funding for public education, child care, early learning, and higher education in Washington by introducing a more progressive tax structure, specifically through a new excise tax on long-term capital gains and modifications to the estate tax. It establishes a 2.90% excise tax on capital gains exceeding $1,000,000, effective January 1, 2025, while retaining the existing 7% capital gains tax. Additionally, the estate tax will see an increase in the top tier rates up to 35% and an increase in the exclusion amount to $3,000,000 for estates of decedents dying on or after July 1, 2025. The bill aims to create a fairer tax system that reduces the financial burden on low-income residents.

Moreover, the bill amends various sections of the Revised Code of Washington (RCW), including adjustments to the estate tax exclusion amounts based on the date of death and the introduction of new definitions and conditions for qualified heirs and family-owned business interests. It establishes personal liability for qualified heirs regarding additional taxes unless secured by a bond and creates a lien on property related to family-owned business interests until tax liabilities are resolved. The Department of Revenue is also empowered to require information from taxpayers claiming deductions and may impose penalties for non-compliance. The act is deemed necessary for state support and takes effect immediately.

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