Washington State Revenue Proposals 2015
We will continue to evaluate new revenue proposals as the are brought forth during the legislative session.
Capital Gains Tax
Capital gains are profits from the sale of corporate stocks, bonds, and other financial assets. Forty-one other states including North Carolina, Georgia and Montana, all tax capital gains.
Under this proposal, everyone profiting $25,000 or more ($50,000 for joint filers) from the sale of corporate stocks, bonds, and other financial assets would pay a 7% tax starting in 2017. The proposal would not apply to assets that are invested in a pension plan, a 401K plan, an IRA or ROTH IRA, or other retirement plan that is recognized by the IRS for federal tax purposes.
Revenues generated would provide a projected $798 million in funding for education in 2017.
- Click here for the WA Budget and Policy Center FAQ page
- Click here for the Office of Financial Management’s highlights
- Click here to read the House Bill 1484
HB 1484 first reading on January 21st, referred to Finance Committee
Carbon Tax (The Carbon Pollution Accountability Act)
This new “market-based” carbon pollution reduction program will require major emitters of greenhouse gas emissions to purchase “allowances” equal to their emissions. Allowances will be sold through public auction several times a year, and the total supply of allowances available for auction will decrease over time, leading to a reduction in total carbon emissions.
$947 million in projected revenues in 2017 would provide funding for transportation and education, as well as The Working Families Tax Rebate. The WFTR was passed in 2008 to provide a sales tax refund to families who qualify for the federal Earned Income Tax Credit. The WFTR has never been funded. Learn more about the WFTR here.
- Click here for background and details from the Governor’s office
- Click here for a fact sheet from One America
- Click here to read the House Bill 1314
HB 1314 Public hearings concluded in the House Committee on the Environment Thursday January 29th
Closing Tax Loopholes
This proposal raises an additional $282 million in 2015-17 by closing five tax loopholes:
- Repeal the sales tax exemption for auto trade-ins valued over $10,000.
- Repeal the use tax exemption for extracted fuel, except wood byproducts (“hog fuel”).
- Convert the nonresident sales tax exemption to a refund.
- Repeal the sales tax exemption on bottled water.
- Repeal the preferential B&O rate for royalties.
State Tax Break Transparency
Little information is publicly available about the tax breaks businesses and corporations receive from the state of Washington.
HB 2134 aims to allow lawmakers and the public more access to information about how businesses use their tax breaks. For example, the Department of Revenue would create a public, searchable online database of companies who receive more than $10,000 per year in tax breaks. Businesses would be required to itemize their tax breaks rather than lumping them together and obscuring the details, allowing lawmakers to better see how the tax breaks are being used. This bill would also streamline the reporting process, making it more clear whether or not a tax break affects job growth, salary growth, and employee benefits.
HB 2134 received a public hearing in the House Committee on Finance Feb 20th