The proposed bill establishes a "millionaires' tax" on households 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 intended to fund essential services such as K-12 education, health care, and higher education, while also providing tax credits to alleviate the financial burden on low and middle-income families and small businesses. The bill also introduces a standard deduction of $1,000,000 for individuals and couples, which will be adjusted annually for inflation, and outlines specific provisions for the allocation and apportionment of income for both resident and nonresident individuals, including nonresident student athletes.

Additionally, the bill includes various amendments to existing tax laws, such as the introduction of a surcharge on Washington taxable income exceeding $250 million at a rate of 0.5 percent, effective January 1, 2026. It clarifies the definitions related to retail sales, digital goods, and services, while providing exemptions for educational institutions and certain categories of businesses. The legislation aims to modernize tax compliance and administration, enhance equity in the tax system, and ensure that the wealthiest households contribute fairly to public services. It also establishes penalties for tax evasion and mandates annual reporting by the Department of Revenue on the costs associated with administering the act.

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
Substitute 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
Engrossed substitute: 82.32.050, 82.08.0206, 82.32.090, 2.10.180, 2.12.090, 2.14.100, 6.15.020, 11.96A.220, 41.32.052, 41.34.080, 41.35.100, 41.37.090, 41.40.052, 41.44.240, 41.26.053, 43.43.310, 82.04.4451, 82.32.045, 82.04.288, 82.04.050, 82.04.192, 1.90.100
Bill as passed Legislature: 82.32.050, 82.08.0206, 82.32.090, 2.10.180, 2.12.090, 2.14.100, 6.15.020, 11.96A.220, 41.32.052, 41.34.080, 41.35.100, 41.37.090, 41.40.052, 41.44.240, 41.26.053, 41.28.200, 43.43.310, 82.04.4451, 82.32.045, 82.04.288, 82.04.050, 82.04.192, 1.90.100
Session law: 82.32.050, 82.08.0206, 82.32.090, 2.10.180, 2.12.090, 2.14.100, 6.15.020, 11.96A.220, 41.32.052, 41.34.080, 41.35.100, 41.37.090, 41.40.052, 41.44.240, 41.26.053, 41.28.200, 43.43.310, 82.04.4451, 82.32.045, 82.04.288, 82.04.050, 82.04.192, 1.90.100