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 that exceed $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 increase in the exclusion amount to $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 sustainable support for the education legacy trust account.

The bill also revises existing tax 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 with a bond, which releases them from personal liability. Furthermore, it introduces a lien in favor of the state on property related to qualified family-owned business interests upon the filing of a Washington return. The legislation defines key terms, sets specific deduction amounts based on the date of death, and outlines conditions for property classification and material participation in farming operations. Overall, the bill aims to refine the estate tax framework and ensure compliance among qualified heirs.

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