Gov. Ferguson signs Washington high-earners income tax; challenges expected

Jim Brunner, The Seattle Times on Mar 30, 2026

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OLYMPIA, Wash. — Gov. Bob Ferguson signed a high-earners income tax into law Monday morning, enacting a 9.9% levy on earnings of more than $1 million.

The new tax would start on 2028 income for people who meet the threshold, with the first payments due in 2029. It is expected to bring in roughly $3 billion to $4 billion a year, affecting an estimated 21,000 households.

That is, if it survives expected lawsuits and ballot challenges from Republicans and business groups.

“This is truly a historical step forward in rebalancing our tax code. It’s the right thing to do for Washington’s working families. It’s the right time to do it. It’s the right policy,” Ferguson said before signing the measure at the state Capitol Monday morning, surrounded by supporters.

The tax measure, Senate Bill 6346, dubbed the “millionaires tax” by supporters, would direct most of the money raised to the state operating budget, which funds schools, universities, health care and other state services. A 5% share is dedicated to child care and early learning subsidies.

It also includes some tax relief for state residents, including eliminating the sales tax on purchases of diapers, hygiene products and over-the-counter drugs. More small businesses would get relief from the state business and occupation tax.

And the measure will make an estimated 460,000 additional households eligible for the Working Families Tax Credit, which provides annual rebates of between $330 and $1,330.

Washington’s sales-tax-reliant tax system has long been rated among the most regressive in the U.S. because it burdens poorer taxpayers while letting the wealthiest off comparatively lightly.

The state has not had an income tax since 1933, when the state Supreme Court struck down a voter-approved tax, ruling 5-4 that it was an illegally constructed levy on property.

Democrats and some legal experts have long criticized that Culliton v. Chase decision as legally flawed and hope the current state Supreme Court will reverse it.

Supporters also hope voters will treat this tax plan more favorably than previous income-tax proposals, which have been rejected ten times over the past nine decades.

Most recently, in 2010, a proposed tax on people earning more than $200,000 a year was overwhelmingly voted down, losing in 38 of 39 counties.