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 intended to fund essential services such as K-12 education, health care, and higher education, while also providing tax credits to prevent double taxation and support small businesses. The bill introduces a new standard deduction of $1,000,000 for individual taxpayers, which will be adjusted annually for inflation, and outlines specific provisions for the allocation of income for both resident and nonresident individuals, including nonresident student athletes.

Additionally, the bill amends existing tax laws to clarify tax obligations and compliance requirements, including penalties for noncompliance and the treatment of retirement benefits under the new Title 82A RCW. It establishes a penalty structure for various tax violations and ensures that retirement benefits are subject to taxation. The legislation also introduces a working families' tax credit for low-income individuals and modifies existing tax credits, while creating a new surcharge of 0.5% on taxable income exceeding $250 million, effective January 1, 2026. Overall, the bill aims to create a more equitable tax system in Washington, ensuring that high-income earners contribute fairly to public services while providing necessary tax relief for lower-income households.

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