WRC

New brief: A Margin Tax Would Make Washington’s Tax Structure Only Marginally More Competitive

A draft bill is being circulated that would replace Washington’s business and occupation (B&O) tax with a margin tax. Like the B&O tax, a margin tax is a type of gross receipts tax. Unlike the B&O tax, the draft margin tax would allow the taxpayer to deduct the greater of (a) 30% of the taxpayer’s […]

New brief: I-645: Repealing the State Individual Income Tax

A 9.9% tax will be imposed on Washington income over $1 million beginning Jan. 1, 2028. Initiative 645 would repeal the income tax and prohibit any state or local taxes on individual income. I-645 would reduce revenues for funds subject to the outlook (NGFO) by $3.108 billion in 2027–29 and by $8.324 billion in 2029–31. […]

New report: 2026 Fiscal Management Performance Review

The Washington Research Council considers budget sustainability to be a primary objective of state fiscal policy and key to our state’s fiscal health, the certainty of government services, and the competitiveness of Washington’s economy. This new periodic review of the state’s fiscal performance will evaluate Washington’s operating budget on multiple factors, including Spending Growth Sustainability, […]

New brief: With the Income Tax, Washington Adds a New, Volatile Layer of Taxation

Under ESSB 6346, a 9.9% tax will be imposed on Washington income over $1 million beginning Jan. 1, 2028. All the provisions in the bill, including the tax rate and the $1 million standard deduction, are statutory, so they could be changed by the Legislature at any time. The determination of taxable income begins with […]

New brief: State and Local Spending on Housing and Homelessness Has Increased Significantly

Federal pandemic relief significantly boosted state spending on housing programs; as the federal funding has been drawn down, the state has added more funding from state sources. Similarly, even as overall spending by local governments has increased in recent years, the share dedicated to housing and homelessness services has increased. From 2014 to 2024 (adjusted […]

New brief: Band-Aid Budget Redux

The Legislature has passed a supplemental operating budget that would increase 2025–27 appropriations from funds subject to the outlook (NGFO) by $2.348 billion (3.0%) compared to the enacted 2025–27 biennial budget. Revised 2025–27 appropriations would be $80.206 billion, which is 11.4% higher than actual 2023–25 spending. Since the biennial budget was adopted last year, the […]

New brief: Comparing the Senate- and House-Passed 2026 Supplemental Operating Budgets

Despite a maintenance level budget shortfall, the operating budgets passed by the Senate and House would both increase net new policy spending. They would balance the budget in 2025–27 using one-time funds, and each proposal assumes that revenues from a new income tax will be collected beginning in 2029. Read the report here.

New brief: Washington Businesses Paid 50% of State and Local Taxes in 2024

From 2000 to 2024, business and occupation tax collections increased by 269.5%. Businesses also pay sales taxes, property taxes, and many other state and local taxes. A new report from the Council on State Taxation finds that businesses paid 50.0% of all state and local taxes in Washington in fiscal year 2024. Washington businesses paid […]

New brief: With New Revenue Package, the Transportation Budget Balances Through 2027–29

To address transportation budget revenue and cost challenges, the Legislature increased transportation taxes and fees. New revenues include the first gas tax increase since 2015 and increases to the retail sales and use taxes owed on several transportation-related transactions. Additionally, beginning in 2027–29, 0.1% of state sales and use tax collections is dedicated to the […]

New report: Historically Large Tax Package Rushed Through at the End of Session

The 2025–27 operating budget relies on a tax package that is estimated to increase revenues to funds subject to the outlook (NGFO) by $9.0 billion over four years. It includes business and occupation (B&O) tax increases (ESHB 2081 and ESSB 5794), the expansion of the sales tax to more services (ESSB 5814), capital gains and […]