Washington passes its first income tax after 24 hours of debate

House approves tax on millionaires

Washington’s state House passed a 9.9% income tax on household earnings above $1 million on March 10, 2026. The vote was 51-46, with eight Democrats breaking from their party to vote no alongside every Republican.

One member was excused. The final vote landed at 6:10 p.m. Tuesday after more than 24 straight hours of floor debate, one of the longest sessions in recent state history. The bill now heads back to the Senate.

The tax targets top earners

Senate Bill 6346 would tax household adjusted gross income above $1 million at 9.9%.

Married couples and domestic partners share one $1 million deduction, so a couple each earning $600,000 would owe the tax on the $200,000 above the line.

The tax would kick in Jan. 1, 2028, with first payments due in 2029.

It could bring in roughly $3.5 billion a year and would hit an estimated 20,000 to 30,000 filers, less than half a percent of the state’s households.

Working families get tax breaks too

The bill doesn’t just tax the wealthy. It expands the Working Families Tax Credit to cover about 810,000 households, more than double the current 350,000.

It also pledges free breakfast and lunch for all public school students in kindergarten through 12th grade. New sales tax breaks would cover everyday items like diapers, shampoo, and over-the-counter medicine.

Small businesses earning under $300,000 would dodge the state’s main business tax, and up to $150 million a year would go toward early learning and child care.

Governor pledged to sign the bill

The bill still needs a Senate concurrence vote on the House’s changes before the session ends March 12. Gov. Bob Ferguson has publicly said he will sign it.

Senate leaders expect a smooth vote. The lead Senate sponsor said she saw no problems with what the House changed, and the governor endorsed the revised version.

If signed, the bill includes a necessity clause that makes it take effect right away.

Supporters say Washington taxes unfairly

Washington has long drawn criticism for one of the most lopsided tax systems in the country.

Without an income tax, the state leans on sales, property, and business taxes, which hit lower-income households harder. Supporters say the new tax asks less than 1% of the wealthiest households to chip in more.

The money would fund education, health care, early learning, and tax cuts for working families.

Sen. Jamie Pedersen, the bill’s prime sponsor, called it a chance to build a tax system that “meets 21st century needs.”

Opponents warn the threshold could drop

Republicans say a graduated income tax violates the state constitution.

Beyond that, critics worry the $1 million line could move lower over time, eventually reaching middle-income families. The shared household deduction also draws fire.

Because married couples split one $1 million threshold instead of getting one each, opponents call it a marriage penalty. Business groups warn wealthy residents and employers might leave.

The Association of Washington Business called the tax a major shift that removes one of the state’s biggest advantages for attracting business.

Republicans pushed 80-plus amendments overnight

The debate started around 5:30 p.m. Monday and ran through the night into Tuesday evening. Republicans introduced more than 80 amendments, including 53 designed to limit the bill.

Nearly all failed on party-line votes. Democrats did accept one key change: the tax threshold can never drop below $1 million per household.

They also agreed to exempt libraries from a new sales tax on services and gave certain health care services a break from a business tax surcharge.

Voters rejected income taxes 10 times

Washington has a long history of saying no to income taxes. Voters have weighed in 11 times since 1932.

They approved one that year, but the state Supreme Court struck it down in 1933.

Every attempt since has failed, including constitutional amendments in 1934, 1936, 1938, 1942, 1970, and 1973, plus ballot measures in 1944, 1975, 1982, and 2010.

Washington is one of just nine states without a personal income tax, and the only solidly Democratic-leaning state without one.

A 2024 income tax ban cleared the way

In March 2024, the Legislature passed Initiative 2111, banning state and local income taxes with wide bipartisan support: 76-21 in the House and 38-11 in the Senate.

But because lawmakers enacted it themselves instead of sending it to voters, state law allows a simple majority to change it after two years.

SB 6346 directly amends that ban, carving out an exception for this specific tax. Republicans call it a betrayal.

Democrats say the ban didn’t meaningfully change existing law.

A court battle is already expected

The state Supreme Court ruled in 1933 that income counts as property, making a graduated income tax unconstitutional.

SB 6346 gets around this by calling itself an excise tax on the “receipt of income,” not a property tax. That’s the same legal theory the court accepted in 2023 when it upheld the state’s 7% capital gains tax.

Opponents plan to file a challenge almost immediately after the governor signs. The case could reach the state Supreme Court quickly.

Voters can’t block it by referendum

The bill’s necessity clause blocks a public referendum, meaning voters can’t directly overturn it through a petition.

Opponents could still pursue a citizen initiative to repeal the tax, but that takes enough signatures to make the ballot.

Republicans tried during debate to strip the necessity clause and put the tax before voters in November. They failed.

Gov. Ferguson had earlier said the public would get a chance to weigh in, which critics call misleading since only an initiative path remains open.

The bill still faces several hurdles

The tax needs Senate concurrence and the governor’s signature before it becomes law. After that, court challenges and a possible ballot initiative to repeal it are both expected.

Whether the tax survives may come down to whether the current state Supreme Court is willing to revisit or work around its 1933 ruling.

If it holds up, Washington would join 41 other states that collect some form of income tax. For now, the bill marks the closest the state has come to an income tax in nearly a century.

This article was created with AI assistance and human editing.

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