The proposed bill establishes a "millionaires' tax" targeting individuals with an annual adjusted gross income of $1,000,000 or more, imposing a tax rate of 9.90% on Washington taxable income starting January 1, 2028. The revenue generated from this tax is earmarked for essential services such as K-12 education, health care, and the working families' tax credit. To mitigate the impact on taxpayers, the bill introduces a new standard deduction of $1,000,000 for individual taxpayers, which will be adjusted annually for inflation. Additionally, it outlines provisions for tax credits to prevent double taxation and includes exemptions for certain income sources, ensuring that the tax primarily affects the wealthiest individuals.

The bill also includes several amendments and new sections related to tax compliance, penalties for non-compliance, and the treatment of retirement benefits. It mandates that taxpayers file returns electronically and establishes a penalty structure for late amendments and non-compliance with tax registration. Furthermore, it clarifies that retirement benefits are not exempt from the newly created Title 82A RCW, which governs the taxation of such benefits. The legislation aims to enhance tax compliance, streamline the tax process for individuals and entities, and provide necessary funding for public services while ensuring a fairer tax system in Washington State.

Statutes affected:
Original bill: 82.32.050, 82.08.0206, 82.32.090, 2.10.180, 2.12.090, 6.15.020, 11.96A.220, 41.32.052, 41.34.080, 41.35.100, 41.40.052, 41.44.240, 41.26.053, 43.43.310, 82.04.4451, 82.32.045, 82.04.288, 1.90.100