Governor Bob Ferguson has officially signed a new “millionaires tax” into law, a measure designed to help close Washington State’s multi-billion dollar budget deficit while providing financial relief to lower-income residents. The legislation, which passed following intense debate in the State House and Senate, will impose a 9.9% tax on annual income exceeding $1 million starting in 2028.
To secure the Governor’s support, the final version of the bill included several “affordability amendments.” These provisions expand the Working Families Tax Credit and eliminate sales taxes on essential goods like over-the-counter medications, diapers, and feminine hygiene products. Additionally, a portion of the tax revenue will be dedicated to childcare and early learning programs.
While supporters argue the tax is a necessary step toward making the state’s tax system more equitable and funding critical public services, critics have voiced concerns. Opponents warn that the high rate could cause wealthy residents and tech leaders to leave the state, potentially harming Washington’s long-term economic competitiveness. The first tax payments under the new law are expected to be collected in 2029.
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