Washington Tax Policy & Rates 2026
Income tax, sales tax, property tax, and overall tax burden for Washington in 2026, with political context.
Tax Policy Overview
Washington State has no income tax but passed a 7% capital gains tax in 2021, upheld by the state supreme court in 2023 over a major political battle. The state is funded by a Business and Occupation Tax on gross receipts and high sales taxes. Western Washington has very high sales taxes.
Key Tax Rates
| Tax Type | Rate / Status |
|---|---|
| Income Tax | None (capital gains 7%) |
| No Income Tax | Yes |
| Sales Tax | 6.5% (+local up to 10.4%) |
| No Sales Tax | No |
| Corporate Tax | Business and Occupation Tax (gross receipts) |
| Property Tax Rank | #29 nationally (1=highest) |
| Overall Tax Burden Rank | #20 nationally (1=highest) |
Political Context
The capital gains tax fight was one of the most contentious tax battles in Washington history. Critics argued it was an income tax (prohibited by the state constitution); courts upheld it as an excise tax on the sale of capital. The $1 million capital gains threshold means relatively few filers pay it. Democrats want to expand it; Republicans want to repeal it.