SB 6346 Washington Senate · 2025-2026 Regular Session

Establishing a tax on millionaires.

SB 6346 would impose a new tax on Washington households with annual income of $1 million or more, affecting approximately the top 0.5% of earners. Revenue generated would fund K-12 education, health care, higher education, and human services programs. The tax excludes income from selling family-owned businesses and real estate, while also including reductions to sales taxes on essentials like personal care products and business taxes through credits. This policy aims to shift tax burden toward high earners to support public services, as the bill states Washington’s current system is the second most regressive in the nation.

Bill status signed all 5 stages cleared

Introduction

Feb 2026

Committee Review

Mar 2026

Senate Passage

Mar 2026

House Passage

Mar 2026

Signed into Law

Mar 2026

Introduced Feb 4, 2026 Signed Mar 30, 2026

Maddy AI version diff · 3 comparisons

What changed between versions

Engrossed Substitute Bill → Substitute Passed Legislature · 8 edits

MODERATE

This bill was amended to expand its scope from taxing only 'individuals' to taxing 'households,' aligning the tax with how other Washington taxes like capital gains are applied. The changes include adding specific exemptions for tribal income and commercial cannabis activities, creating new tax relief for diapers, over-the-counter drugs, and hygiene products, and establishing a new fiscal account to support local government revenue. Additionally, the bill was updated to include a new advisory group for implementation and to clarify the effective dates for various tax relief measures.

Scope change

The bill's scope expanded from applying to individuals to applying to households, and new exemptions were added for federally recognized tribes and commercial cannabis activities.

ELIGIBILITY

Changed the tax base from 'individuals' to 'households' to align with the state's capital gains tax policy and property tax exemptions.

Added specific exemptions for income derived from federally recognized tribes and commercial cannabis activities licensed under state law.

FISCAL

Created a new 'city and county fiscal health account' to transfer general fund revenues and offset local government revenue losses from tax cuts.

REQUIREMENT

Established a new advisory group comprising legislators, business leaders, and tribal representatives to consult on the implementation and administration of the tax.

Added a requirement for the Department of Revenue to annually report on the cost of administration, staffing, and the ratio of implementation costs to revenue raised.

SCOPE

Added new tax exemptions for the sale and use of diapers, over-the-counter drugs, and grooming/hygiene products effective January 1, 2029.

TIMELINE

Adjusted effective dates for various sections, including moving the start of tax relief measures to January 1, 2029, and clarifying the timeline for the working families' tax credit.

DEFINITION

Added a new definition for 'Washington adjusted taxable income' to reflect the household-based tax structure.

Substitute Bill → Engrossed Substitute Bill · 9 edits · Mar 11, 2026

MAJOR

The bill was updated from a 'Substitute' to an 'Engrossed' version, incorporating amendments that add new tax credits for business and occupation taxes, expand the definition of pass-through entities, and adjust the standard deduction for nonresidents. The text also includes significant changes to the sales tax code, redefining what constitutes a taxable retail sale to include various digital goods and services while excluding specific categories like certain fitness facility charges and out-of-home advertising. Additionally, the bill references a new codified title (82A RCW) with a different section number (1103 instead of 1003), indicating a structural reorganization of the new millionaire tax law.

Scope change

The bill's scope expanded to include additional tax credits and broader definitions for pass-through entities and sales tax applicability, while the codification section indicates the new tax law will be organized under a different section number in the Revised Code of Washington.

FISCAL

Added a new tax credit for business and occupation and public utility taxes to prevent double taxation of the same income.

DEFINITION

Expanded the definition of 'pass-through entity' to explicitly include partnerships, LLCs, and S corporations that report income to owners for federal tax purposes.

Added a new section defining incomplete nongrantor trusts for Washington residents as taxable income.

REQUIREMENT

Adjusted the standard deduction for nonresidents by changing the reference section number from 310 to 311 and modifying the adjustment formula description.

Changed the election deadline for pass-through entities to pay the tax from April 15 to June 15.

ELIGIBILITY

Updated the estimated tax payment threshold for individuals to require payments in excess of $5,000.

SCOPE

Significantly redefined 'sale at retail' to include digital goods, codes, and automated services, while excluding specific services like web hosting, data processing, and certain fitness facility charges.

TECHNICAL

Updated the codification section number for the new tax title from 1003 to 1103, reflecting a change in how the law is organized in the state code.

Added a new section stating that sales tax provisions do not apply to the new digital goods and services tax sections.

Floor votes · Senate Feb 16, 2026 · House Mar 9, 2026

How they voted

28–23

Passed

Total votes 51

Feb 16, 2026

D Democratic31

27 Yea 4 Nay

87% Yea

R Republican20

1 Yea 19 Nay

95% Nay

Vote distribution

All Yea All Nay Mixed No data

Full legislative history

Actions timeline

Total actions

Key actions

Committee

Amendments

Mar 30, 2026

Signed into law

Governor signed.

executive

Mar 12, 2026

Lower · Passed

Speaker signed.

lower

Mar 12, 2026

Upper · Passed

President signed.

upper

Mar 11, 2026

Upper · Passed

Passed final passage; yeas, 27; nays, 21; absent, 0; excused, 1.

upper

Mar 11, 2026

Upper · Passed

Senate concurred in House amendments.

upper

Mar 9, 2026

Lower · Passed

Floor amendment(s) adopted.

lower

Mar 9, 2026

Amended

Committee amendment not adopted.

lower

Mar 2, 2026

Committee

Referred to Rules 2 Review.

lower

Feb 27, 2026

Lower · Passed

Minority; without recommendation.

lower

Feb 27, 2026

Lower · Passed

Minority; do not pass.

lower

Feb 27, 2026

Lower · Passed

FIN - Majority; do pass with amendment(s).

lower

Feb 27, 2026

Lower · Passed

Executive action taken in the House Committee on Finance at 8:00 AM.

lower

Feb 24, 2026

Lower · Passed

Public hearing in the House Committee on Finance at 8:00 AM.

lower

Feb 16, 2026

Upper · Passed

Floor amendment(s) adopted.

upper

Feb 9, 2026

Upper · Passed

Minority; without recommendation.

upper

Feb 9, 2026

Upper · Passed

Minority; do not pass.

upper

Feb 9, 2026

Upper · Passed

Executive action taken in the Senate Committee on Ways & Means at 10:30 AM.

upper

Feb 6, 2026

Upper · Passed

Public hearing in the Senate Committee on Ways & Means at 1:30 PM.

upper

1 primary · 25 co-sponsors