Updated! FAQs About Taxing Capital Gains In Washington State
Updated February 10, 2015 to include a question/answer section about gifts of stock to charities and formatting adjustments.
Updated January 12, 2015. The document below has been changed to reflect Governor Inslee's capital gains tax proposal. It also includes end notes and links to additional resources on capital gains taxes.
In December 2014, Governor Inslee proposed a new excise tax on capital gains as part of a responsible approach to improving schools in Washington state without harming other investments kids need in order to succeed in the classroom, such as health care, child care, and opportunities to pursue higher education at a community college or university. Washingtonians will certainly have many questions about how this tax would work and who would pay it. Answers to a number of key questions are included in the “Frequently Asked Questions” document below.
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Governor Inslee proposes to tax capital gains in excess of $50,000 per year ($25,000 for singles) at a rate of 7 percent. Under his proposal, the tax would generate about $800 million per year in new resources and would be paid by less than 1 percent of Washingtonians.
This proposal would greatly improve Washington state’s flawed, 1930s-era tax system while providing much needed resources for schools and other investments that help create jobs and build a strong economy.