The Washington State Senate has voted to approve a new tax on residents who earn more than $1 million annually.
Governor Bob Ferguson, a Democrat, has vowed to sign the bill.
The legislation, approved Wednesday by the Democratic-led Senate, will impose a 9.9% tax on state residents with incomes exceeding $1 million per year.
Supporters claim the measure would affect only approximately 0.5% of high-income taxpayers while generating billions annually for education, healthcare, housing programs, and tax credits for working families—along with eliminating sales taxes on personal care items such as shampoo.
“The intense frustration Washingtonians feel about federal policies like HR1 and other congressional actions created strong public support for this tax,” Washington House Majority Leader Joe Fitzgibbon said.
The tax would take effect in 2028, with the first payments due in 2029.
Washington has no state income tax. Voters have rejected statewide income tax proposals multiple times over the past century.
Republicans criticized the bill, stating it fails to address the state’s budget challenges and could prompt corporations that call Washington home—such as Starbucks—to relocate.
“Ten years from now, our state will be a different place than it is today,” state Senator John Braun said.
Starbucks founder Howard Schultz announced that he and his family are moving from Seattle to Florida on the same day lawmakers passed the tax legislation. In a LinkedIn post, Schultz stated he and his wife, Sheri, have entered retirement after more than 40 years in Seattle. He did not reference the bill in his announcement.
Fitzgibbon expects a ballot initiative to repeal the tax by November. Braun noted organizations are preparing legal challenges to the bill.
Braun emphasized that state law prohibits property taxes from being levied at different rates or across income levels.
