Avalara Taxrates > Blog > Legislation > Washington Considers Adding Income Tax, Lowering Sales Tax - Avalara

Washington Considers Adding Income Tax, Lowering Sales Tax


 Gérard Depardieu Won't Move to Washington.

Lawmakers are talking in Olympia, Washington, though not all like what they're hearing. A handful of Senate Democrats are calling for dramatic changes to the state tax system, including the addition of an income tax and a sharp drop in the state sales tax rate.

Washington State does not currently have personal or corporate income taxes. It is one of only seven states without one -- Alaska, Florida, Nevada, South Dakota, Texas, and Wyoming being the others. From time to time, the idea of imposing an income tax surfaces.

If certain Democratic lawmakers have their way, the time for a Washington State income tax is now.

SB 5166 would:

  • Drop the state sales tax to 3.5% (from 6.5%);
  • Eliminate the state's portion of the property tax; and
  • Impose a staggered income tax.

Personal Income Taxes

The measure proposes the following rates for married individuals filing jointly:

  • Taxing the first $49,900 of taxable income at 2.2%;
  • Taxing income over $49,900 and up to $120,650 at $1,098 plus 3.5% of the excess over $49,900; and
  • Taxing income over $120,650 at $3,5474 plus 6.0% of the excess over $120,650.

The measure proposes the following rates for every head of household:

  • Taxing the first $37,425 of taxable income at 2.2%;
  • Taxing income over $37,425 and up to $90,488 at $823 plus 3.5% of the excess over $37,425; and
  • Taxing income over $90,488 at $2,681 plus 6.0% of the excess over $90,488.

The measure proposes the following rates for everyone filing individually:

  • Taxing the first $24,950 of taxable income at 2.2%;
  • Taxing income over $24,950 and up to $60,325 at $549 plus 3.5% of the excess over $24,950; and
  • Taxing income over $60,325 at $1,787 plus 6.0% of the excess over $60,325.

Senator Maralyn Chase (D-Shoreline), who is sponsoring the bill, has said that "income tax is the appropriate response to the slowly improving economy and high rate of unemployment." She argued, "Until our people, the workforce, have enough disposable income in their pockets to go out to our brick-and-mortar stores to buy durable goods, we are not going to have economic recovery, given our present tax structure."

But support for an income tax is limited. SB 5166 was one of the reasons Senate Coalition-Majority Leader Rodney Tom (D-Bellevue) "chastised Democrat members for playing politics and not taking the will of Washingtonians seriously." He reminded that "[t]he voters of this state have repeatedly said that they do not want a state income tax… ."

John Burbank, executive director of the Economic Opportunity Institute, argues that Washington's tax structure isn't equitable. He said that when millionaires have additional money in their pockets, they use it "for investments in Wall Street or a travel to Paris."

Keep Your Pockets Out of France

Those millionaires better watch out if they do travel to Paris. Renowned French actor Gérard Depardieu has reportedly renounced his French citizenship because French income taxes "now claim 85 percent of his income." He has registered as a resident of Belgium and has applied for Russian citizenship, where he would be welcomed. Russia has a flat 13 percent income tax.

Get Free Tax Rate Tables

Washington State Rates

photo credit: Gilles Couteau via photopin cc


Sales tax rates, rules, and regulations change frequently. Although we hope you'll find this information helpful, this blog is for informational purposes only and does not provide legal or tax advice.
Gail Cole
Avalara Author
Gail Cole
Gail Cole
Avalara Author Gail Cole
Gail began researching and writing about sales tax in 2012 and has been fascinated with it ever since. She has a penchant for uncovering unusual tax facts, and endeavors to make complex sales tax laws more digestible for both experts and laypeople.