The full Senate passed an amended version of the proposal supporters call the “millionaire tax” on Monday, Feb. 16, by a 27–22 vote that largely split along party lines. Most Democrats voted in favor of the bill, though three Democrats joined nineteen Republicans in opposition.
SB 6346 would apply a 9.9% tax to annual income above $1 million, with state analysts estimating about 30,000 taxpayers would be affected. The proposal is projected to generate around $3.5 billion per year once fully implemented.
Gov. Bob Ferguson has endorsed the concept as part of his 2026 legislative agenda, but wasn’t satisfied with the amount of tax relief included in the version introduced by Democratic majority leaders in the legislature last week.
The Senate Ways and Means Committee approved a substitute version on Feb. 9 that directs 7% of revenue to cover rising public defense costs, up from 5% in the earlier draft and makes cities as well as counties eligible for that money. Most of the revenue would go to the state general fund.
The substitute version:
- Increases the business and occupation tax credit for small businesses.
- Raises the charitable deduction cap for individuals subject to the tax from $50,000 to $100,000.
- Exempts the tax from the I-2111 income tax ban approved in 2024.
Other tax offsets remain intact:
- Ends a B&O surcharge on companies with more than $250 million in taxable income one year earlier than scheduled.
- Eliminates state sales tax on grooming and hygiene products.
- Lowers the minimum age for Working Families Tax Credit eligibility from 25 to 18.
The tax would represent a break with 90 years of precedent.
Last week, Rep. April Berg, D-MIll Creek, chair of the House Finance Committee, told The Impact that the income tax was“a fair, progressive, way to do taxes on individuals in our state.”
“It’s an incremental step to getting to a more fair and balanced tax code,” she said.
Rep. Ed Orcutt, R-Kalama, the committee’s ranking member, said his constituents believe they are being “taxed to death” and that the state leaders should do a better job managing money.
Berg countered that without taxes, you can’t have police officers, firefighters or teachers.
“That’s where taxes go,” she said.
Orcutt believes the tax will ultimately be extended to nonmillionaires if it passes.
“Look back through the history of our state and every time there’s a budget shortfall that’s what happens,” said Orcutt. “There is no combination of taxes that can keep up with a legislature that continually overspends its revenue.”
The first tax payments would be due in 2029, but the bill contains an emergency clause so the law would take effect immediately if enacted.
Supporters anticipate the law will be challenged in court and potentially at the ballot box.
Under the state constitution, the emergency clause means the bill is exempt from a referendum challenge, which requires half as many signatures as an initiative.
The substitute bill directs the Department of Revenue not to pause the rollout of the tax if there is litigation.