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Washington’s 9.9% Millionaires Tax Nears House Vote as Governor Pushes Further Relief

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Senate Passes 9.9% Tax on Income Over $1 Million The Washington State Senate approved Senate Bill 6346, imposing a 9.9% levy on household earnings above $1 million and projecting $3.7 billion in annual revenue, with collections slated to begin in 2029 [3]. The measure pairs the new tax with reductions for small businesses, expands the Working Families Tax Credit, eliminates sales tax on hygiene products, and earmarks 7% of the revenue for public‑defense services [3]. Proponents argue the tax targets the wealthiest 2 % while opponents warn the $1 million floor could be lowered later, potentially broadening the tax base [3].

House Moves Bill Toward Final Vote This Week A House proposal mirroring the Senate’s 9.9% rate is set for a legislative vote within three weeks of the March 12 session deadline [1]. The bill taxes only salary‑derived income, excluding real‑estate holdings and investment accounts, but counts rental income toward the $1 million threshold and would apply to professional athletes earning over that level [1]. Governor Bob Ferguson has said he will not sign the bill if the income floor is reduced, and lawmakers are negotiating earmarks for schools, low‑income families, small businesses, and five sales‑tax holidays [1].

Governor Ferguson Demands Additional Relief Before Signing Governor Ferguson expressed reservations, insisting the legislation must remove the sales tax on diapers and create two sales‑tax holidays—one three‑day weekend and one two‑day holiday for items under $1,000—estimated to return about $141 million each year to residents [2][3]. He also called for a larger expansion of the Working Families Tax Credit and more direct benefits for Washington families and small businesses before offering his support [2][3]. The governor’s stance has prompted House leaders to seek compromises that address these concerns.

Legislative Leaders Expect Compromise Before March 12 Deadline House Majority Leader Joe Fitzgibbon said the leadership will work hard to incorporate the governor’s suggestions, while Speaker Laurie Jinkins noted broad Democratic caucus backing for the tax [2]. Both leaders expressed confidence a deal can be reached before the session ends on March 12, with the first House committee hearing scheduled for next week and anticipated adjustments to the Senate version [2]. Negotiations continue as the bill moves closer to a final vote.

Sources

Timeline

2025 – Washington remains one of nine states without a personal income tax, while several other states have already adopted millionaire taxes, setting a national backdrop for the state’s own proposal [1].

Dec 23, 2025 – Gov. Bob Ferguson announces support for an income‑based millionaire tax on earnings above $1 million, saying it would affect about 0.5 % of residents, raise at least $3 billion annually, fund working‑family credits, small‑business relief, K‑12 education and eliminate sales tax on hygiene items, and be indexed to inflation so it never impacts 99 % of Washingtonians, with revenues not arriving until 2029 [8].

Dec 24, 2025 – Ferguson backs a 9.9 % levy on income over $1 million as part of a broader plan to close a $2.3 billion budget shortfall by mid‑2027, pledging that a portion of the revenue will expand the Working Families Tax Credit or cut sales taxes for lower‑income residents, and noting the tax could take effect by 2029 and generate at least $3 billion a year [1].

Jan 12, 2026 – The Washington Legislature opens a 60‑day session dominated by a $2.3 billion budget gap; Ferguson reiterates backing for a millionaire tax that would start in 2029, pairs it with broad spending cuts across universities and health programs, and sets policy debates on Flock camera data, immigration warrants and police mask rules [7].

Jan 25, 2026 – In his State of the State address, Governor Ferguson again affirms his support for a high‑earner tax, signaling the administration’s fiscal priority for the 2026 session [6].

Feb 4, 2026 – Democrats introduce Senate Bill 6346, a 9.9 % tax on incomes above $1 million projected to raise $3.7 billion annually from roughly 30,000 taxpayers; the bill earmarks funds for schools, early‑learning, health care, eliminates sales tax on grooming items, expands the Working Families Tax Credit and allocates 5 % to counties for public safety, but Ferguson rejects it as “not close” to returning enough money to residents [5].

Feb 18, 2026 – The Senate passes the millionaire tax, pairing it with small‑business tax relief, an expanded Working Families Tax Credit, a sales‑tax exemption on hygiene products and earmarking 7 % of revenue for public‑defense services; Ferguson backs the concept but refuses to sign the current version, urging more benefits for families and proposing two sales‑tax holidays that would return about $141 million each year [4].

Feb 19, 2026 – After the Senate’s approval, Governor Ferguson demands the removal of the diaper sales tax and the creation of five sales‑tax holidays before signing; House Majority Leader Fitzgibbon says the leadership will work to incorporate these ideas, Speaker Jinkins notes strong Democratic caucus support, and both leaders expect a compromise before the March 12 session deadline [3].

Feb 20, 2026 – The House proposal for a 9.9 % tax on earnings above $1 million moves toward a vote, specifying that only salary (not assets) is taxed, rental income counts toward the threshold, professional athletes would be liable, and the governor opposes lowering the $1 million floor; lawmakers aim to finalize revenue earmarking within three weeks ahead of the March 12 deadline [2].

Mar 12, 2026 – The legislative session deadline approaches, with leaders confident a deal on the millionaire tax and its earmarked spending will be reached before the session ends [3][2].

2029 – If enacted, the millionaire tax begins collecting revenue, projected to generate $3‑$3.7 billion annually for education, low‑income relief, small‑business tax cuts and public‑defense funding, while Ferguson’s proposed sales‑tax holidays each return roughly $141 million to residents [4][5].

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