On February 23rd I wrote about the capital gains tax bill passed by the Senate Ways and Means Committee, SSB 5096.

Under this bill, the tax rate would be 7%, and the first $250,000 of capital gain would be excluded from tax for each return, without regard to whether the filer is a single individual or a couple. Exemptions include:

• All real estate
• Various retirement savings plans for example IRAs, 401(k)s, 403(b)s
• Property sold because of a federal, state or local government condemnation proceeding
• Cattle, horses and breeding livestock used in farming or ranching
  Agricultural land in cases where the seller has been actively involved in its use
• Timber or timberland
• Depreciable property used in a trade or business
• Goodwill included in the price received in the sale of an automobile dealership
• “Qualified family-owned small businesses”

On Saturday, the Senate passed the bill, now ESSB 5096, with two amendments. The first of the amendments, proposed by Sen. Hobbs, removed the “emergency clause,” which would have prevented citizens from petitioning for a vote on the bill before it became law. The second amendment, proposed by Sen. Liias, exempts from tax the portion of the gain from the sale of a business that is attributed to the gain in value of real estate owned by the business.

Neither amendment deals with the bill’s volatility issues, which Emily wrote about here and here.

On to the House.