New version of income tax bill gets WA governor’s blessing
Published 1:30 am Friday, March 6, 2026
Democrats in the Washington state House released a revised income tax proposal Friday that drives more money into early learning programs, increases assistance for lower-income families, and eliminates sales tax on a greater number of consumer products.
The much-anticipated overhaul of the so-called “millionaires’ tax” also exempts public schools from paying a new sales tax on services and ditches funding for public defense in local courts statewide.
Gov. Bob Ferguson heaped praise on the 107-page rewrite of Senate Bill 6346 and pledged to sign it. Included is a further expansion of a tax credit for lower-income families that is aligned with the governor’s proposals.
Another big change earmarks 5% of annual tax proceeds for the state’s Fair Start for Kids program that promotes access, caps copays, and provides resources to support child care and early learning providers.
“I strongly encourage the Legislature to pass this bill,” Ferguson said in a statement. “It represents a historic step forward in rebalancing our unfair system and making life more affordable for Washington families and small business owners.
Ferguson’s embrace of the latest iteration comes after his icier response to earlier versions of the controversial legislation, which would impose a new 9.9% tax on household income over $1 million a year.
He’s been at odds with Democratic lawmakers over how much of the estimated $3 billion a year would be spent on tax relief for working families and tax credits for small businesses. Collections from the tax, which is expected to be challenged in court and on the ballot, would begin in 2029.
On Tuesday, he warned that, absent an agreement on ideas he’d pushed for, he would wait until 2027 to finalize the consequential policy. And there have been a number of House Democrats withholding support because of concerns the bill did not do enough for families on the economic margins.
As of Friday morning, the House had not scheduled a vote on the legislation. The session is scheduled to end March 12.
This story was originally published by the Washington State Standard.
