Washington

Washington imposes a 7% excise on long-term capital gains

“An excise tax is imposed on the sale or exchange of long-term capital assets. Only individuals are subject to payment of the tax, which equals seven percent multiplied by an individual's Washington capital gains.”

Note: RCW 82.87.040(1)(a) establishes a 7% excise on Washington long-term capital gains, effective January 1, 2022. Verbatim quote verified against app.leg.wa.gov RCW 82.87.040.

Additional 2.9% on Washington capital gains exceeding $1,000,000

“An additional excise tax is imposed on the sale or exchange of long-term capital assets, which equals 2.90 percent multiplied by the portion of an individual's Washington capital gains exceeding $1,000,000.”

Note: RCW 82.87.040(1)(b) imposes an additional 2.9% excise on Washington capital gains exceeding $1,000,000, effective January 1, 2025. Verbatim quote verified against app.leg.wa.gov RCW 82.87.040.

Additional 2.9% on Washington capital gains exceeding $1,000,000

“An additional excise tax is imposed on the sale or exchange of long-term capital assets, which equals 2.90 percent multiplied by the portion of an individual's Washington capital gains exceeding $1,000,000.”

Note: RCW 82.87.040(1)(b) imposes an additional 2.9% excise on Washington capital gains exceeding $1,000,000, effective January 1, 2025. Verbatim quote verified against app.leg.wa.gov RCW 82.87.040.

Washington capital-gains standard deduction for TY2025: $278,000 (CPI-adjusted per RCW 82.87.150)

“The standard deduction for 2025 is $278,000. In 2024 the standard deduction was $270,000.”

Note: WA DOR publishes the CPI-adjusted standard deduction each year per RCW 82.87.150. The TY2025 operative deduction is $278,000, not the $250,000 statutory base. Confidence medium: source is a WA DOR agency page (dor-guidance), not the statute itself.

Washington capital-gains standard deduction: $250,000 statutory base, $278,000 TY2025 CPI-adjusted

“A standard deduction of $250,000 per individual, or in the case of spouses or domestic partners, their combined standard deduction is limited to $250,000.”

Note: RCW 82.87.150 mandates annual CPI adjustment (Seattle-area CPI, rounded to nearest $1,000). WA DOR publishes the adjusted figure each October. TY2025 operative deduction: $278,000 (per WA DOR: https://dor.wa.gov/taxes-rates/other-taxes/capital-gains-tax). TY2024 was $270,000. The $250,000 encoded here is the statutory base only; see WA_DEDUCTION_278K for the operative TY2025 figure.

WA capital gains excise does not apply to interest income muni and Treasury interest fully exempt

“"Washington capital gains" means an individual's adjusted capital gain, as modified in RCW 82.87.060, for each return filed under this chapter. "Adjusted capital gain" means federal net long-term capital gain:”

Note: RCW 82.87.020 defines the Washington capital gains excise base as federal net long-term capital gain from the sale or exchange of capital assets. Interest income is not a capital gain, so municipal and Treasury interest falls outside the excise base.

WA capital gains excise does not apply to interest income muni and Treasury interest fully exempt

“"Washington capital gains" means an individual's adjusted capital gain, as modified in RCW 82.87.060, for each return filed under this chapter. "Adjusted capital gain" means federal net long-term capital gain:”

Note: RCW 82.87.020 defines the Washington capital gains excise base as federal net long-term capital gain from the sale or exchange of capital assets. Interest income is not a capital gain, so municipal and Treasury interest falls outside the excise base.

Washington does not conform to IRC §1400Z-2 QOZ gain deferral and exclusion

“'Adjusted capital gain' means federal net long-term capital gain computed as if Title 26 U.S.C. Secs. 55 through 59, 1256, 1400Z-1, and 1400Z-2 of the internal revenue code did not exist.”

Note: RCW 82.87.020 defines the Washington capital gains excise tax base such that §1400Z-2 QOZ deferral and exclusion provisions are ignored. Gain deferred or permanently excluded federally is included in the WA excise tax base.

WAC 458-20-301 Examples 6-7 confirm: QOZ-deferred gain is included in WA capital gains in year of investment

“An individual's Washington capital gains is based on their federal net long-term capital gain, which is defined as the net long-term capital gain reportable for federal income tax purposes determined as if Title 26 U.S.C. Secs. 55 through 59, 1400Z-1, and 1400Z-2 of the Internal Revenue Code did not exist. Joseph must include the $1,300,000 in long-term capital gain from his 2023 stock sale in calculating his 2023 Washington capital gains.”

Note: WAC 458-20-301 Examples 6 and 7 confirm that QOZ-deferred gain is taxable by WA in the year of the deferral election, not deferred as under federal law.

Washington conforms to IRC §1202 QSBS exclusion (not in RCW 82.87.020 addback list)

“'Adjusted capital gain' means federal net long-term capital gain computed as if Title 26 U.S.C. Secs. 55 through 59, 1256, 1400Z-1, and 1400Z-2 of the internal revenue code did not exist.”

Note: Conformity by omission: IRC §1202 is absent from RCW 82.87.020's closed addback list. The statute explicitly names §1400Z-1 and §1400Z-2 (which it excludes) but does not list §1202, therefore §1202-excluded gain conforms and is not added back. Corroborated by WA DOR FAQ.

WA DOR FAQ: QSBS gain excluded under IRC §1202 is not subject to Washington capital gains tax

“No, you do not owe Washington's capital gains tax on gain from the sale or exchange of qualified small business stock if the gain was excluded from your federal net long-term capital gain under IRC Section 1202.”

Note: WA DOR FAQ affirmative statement confirming §1202 QSBS conformity. Agency guidance corroborates the statutory proof-by-omission in WA_QSBS_CONFORMITY (RCW 82.87.020).

WA capital gains excise does not apply to interest income muni and Treasury interest fully exempt

“"Washington capital gains" means an individual's adjusted capital gain, as modified in RCW 82.87.060, for each return filed under this chapter. "Adjusted capital gain" means federal net long-term capital gain:”

Note: RCW 82.87.020 defines the Washington capital gains excise base as federal net long-term capital gain from the sale or exchange of capital assets. Interest income is not a capital gain, so municipal and Treasury interest falls outside the excise base.

WA capital gains excise does not apply to interest income muni and Treasury interest fully exempt

“"Washington capital gains" means an individual's adjusted capital gain, as modified in RCW 82.87.060, for each return filed under this chapter. "Adjusted capital gain" means federal net long-term capital gain:”

Note: RCW 82.87.020 defines the Washington capital gains excise base as federal net long-term capital gain from the sale or exchange of capital assets. Interest income is not a capital gain, so municipal and Treasury interest falls outside the excise base.

WA capital gains excise does not apply to interest income muni and Treasury interest fully exempt

“"Washington capital gains" means an individual's adjusted capital gain, as modified in RCW 82.87.060, for each return filed under this chapter. "Adjusted capital gain" means federal net long-term capital gain:”

Note: RCW 82.87.020 defines the Washington capital gains excise base as federal net long-term capital gain from the sale or exchange of capital assets. Interest income is not a capital gain, so municipal and Treasury interest falls outside the excise base.

WA capital gains excise does not apply to interest income muni and Treasury interest fully exempt

“"Washington capital gains" means an individual's adjusted capital gain, as modified in RCW 82.87.060, for each return filed under this chapter. "Adjusted capital gain" means federal net long-term capital gain:”

Note: RCW 82.87.020 defines the Washington capital gains excise base as federal net long-term capital gain from the sale or exchange of capital assets. Interest income is not a capital gain, so municipal and Treasury interest falls outside the excise base.

Washington imposes a 7% excise on long-term capital gains

“An excise tax is imposed on the sale or exchange of long-term capital assets. Only individuals are subject to payment of the tax, which equals seven percent multiplied by an individual's Washington capital gains.”

Note: RCW 82.87.040(1)(a) establishes a 7% excise on Washington long-term capital gains, effective January 1, 2022. Verbatim quote verified against app.leg.wa.gov RCW 82.87.040.

Washington imposes a 7% excise on long-term capital gains

“An excise tax is imposed on the sale or exchange of long-term capital assets. Only individuals are subject to payment of the tax, which equals seven percent multiplied by an individual's Washington capital gains.”

Note: RCW 82.87.040(1)(a) establishes a 7% excise on Washington long-term capital gains, effective January 1, 2022. Verbatim quote verified against app.leg.wa.gov RCW 82.87.040.

Washington estate tax H1 2025 (before July 1): 10% to 20% graduated; $2,193,000 exclusion

“A tax in an amount computed as provided in this section is imposed on every transfer of property located in Washington.”

Note: Pre-ESSB-5794 schedule applied to deaths before July 1, 2025: 10%-20% graduated, top 20% above $11M; $2,193,000 exclusion (WAC 458-57-105). ESSB 5794 (2025 session) raised rates to 10%-35% and exclusion to $3,000,000 effective July 1, 2025. Confidence medium: quote is the base taxability clause unchanged by ESSB 5794; H1 figures sourced from WAC 458-57-105 records and ESSB 5794 floor debate materials, not re-read from a live archival statute text.

Washington estate tax H1 2025 (before July 1): 10% to 20% graduated; $2,193,000 exclusion

“A tax in an amount computed as provided in this section is imposed on every transfer of property located in Washington.”

Note: Pre-ESSB-5794 schedule applied to deaths before July 1, 2025: 10%-20% graduated, top 20% above $11M; $2,193,000 exclusion (WAC 458-57-105). ESSB 5794 (2025 session) raised rates to 10%-35% and exclusion to $3,000,000 effective July 1, 2025. Confidence medium: quote is the base taxability clause unchanged by ESSB 5794; H1 figures sourced from WAC 458-57-105 records and ESSB 5794 floor debate materials, not re-read from a live archival statute text.

Washington estate tax: graduated 10% to 35% (from July 1, 2025); $3,000,000 exclusion for deaths on or after July 1, 2025

“A tax in an amount computed as provided in this section is imposed on every transfer of property located in Washington.”

Note: WA estate tax is separate from the CG excise (RCW 82.87). Rate schedule changed July 1, 2025 per ESSB 5794 (2025 session). H2 2025 (July 1 onward): 10%-35% graduated, top 35% above $9M; $3,000,000 exclusion. WAC 458-57-105 confirms exclusion amounts. Confidence medium: the quoted text is the base taxability clause (unchanged by ESSB 5794); the rate schedule and new exclusion amount come from ESSB 5794 and WAC 458-57-105, not from this verbatim RCW text.

Washington estate tax top rate reverts to 20% for deaths on or after July 1, 2026

“$9,000,000 and up: $1,490,000 plus 20% of the amount over $9,000,000”

Note: The 10%-35% schedule (ESSB 5794) applied only to deaths July 1, 2025 through June 30, 2026. ESB 6347 (2026 session) reverts the schedule to 10%-20% (top 20% above $9M WA taxable estate) for deaths on or after July 1, 2026. Rate table verified against the WA DOR estate tax tables page (agency guidance).

Washington estate tax: graduated 10% to 35% (from July 1, 2025); $3,000,000 exclusion for deaths on or after July 1, 2025

“A tax in an amount computed as provided in this section is imposed on every transfer of property located in Washington.”

Note: WA estate tax is separate from the CG excise (RCW 82.87). Rate schedule changed July 1, 2025 per ESSB 5794 (2025 session). H2 2025 (July 1 onward): 10%-35% graduated, top 35% above $9M; $3,000,000 exclusion. WAC 458-57-105 confirms exclusion amounts. Confidence medium: the quoted text is the base taxability clause (unchanged by ESSB 5794); the rate schedule and new exclusion amount come from ESSB 5794 and WAC 458-57-105, not from this verbatim RCW text.

Washington estate tax exclusion $3,076,000 for deaths January 1 to June 30, 2026; $3,000,000 on or after July 1, 2026

“The filing threshold and exclusion amount is set at $3,076,000 for decedents passing away between January 1, 2026 and June 1, 2026”

Note: The page's 'June 1, 2026' reads as a typo for June 30: the companion DOR tables page lists '1/1/2026-6/30/2026: $3,076,000'. The same page states the exclusion is $3,000,000 for deaths on or after July 1, 2026 and 'is not set to increase going forward due to an expired CPI in the statute.'

Washington estate tax exclusion $3,076,000 for deaths January 1 to June 30, 2026; $3,000,000 on or after July 1, 2026

“The filing threshold and exclusion amount is set at $3,076,000 for decedents passing away between January 1, 2026 and June 1, 2026”

Note: The page's 'June 1, 2026' reads as a typo for June 30: the companion DOR tables page lists '1/1/2026-6/30/2026: $3,076,000'. The same page states the exclusion is $3,000,000 for deaths on or after July 1, 2026 and 'is not set to increase going forward due to an expired CPI in the statute.'

Washington capital-gains standard deduction: $250,000 statutory base, $278,000 TY2025 CPI-adjusted

“A standard deduction of $250,000 per individual, or in the case of spouses or domestic partners, their combined standard deduction is limited to $250,000.”

Note: RCW 82.87.150 mandates annual CPI adjustment (Seattle-area CPI, rounded to nearest $1,000). WA DOR publishes the adjusted figure each October. TY2025 operative deduction: $278,000 (per WA DOR: https://dor.wa.gov/taxes-rates/other-taxes/capital-gains-tax). TY2024 was $270,000. The $250,000 encoded here is the statutory base only; see WA_DEDUCTION_278K for the operative TY2025 figure.

Washington capital gains excise: only 'individuals' (natural persons) are taxpayers

“"Individual" means a natural person.”

Note: RCW 82.87.040(1)(a) imposes the tax only on individuals; RCW 82.87.020(4) defines 'individual' as a natural person. A trust is not a natural person, so a trust's own sale is outside the excise except through the beneficial-owner attribution rules of RCW 82.87.040(4)(b). Verbatim quote verified against app.leg.wa.gov RCW 82.87.020.

WAC 458-20-301: a nongrantor trust is not a pass-through; beneficiaries taxed only on distributions

“The department does not consider estates, or trusts other than grantor trusts, to be pass-through entities. However, beneficiaries of estates and nongrantor trusts may nevertheless be subject to capital gains excise tax on distributions of capital gains received from estates and nongrantor trusts.”

Note: DOR's own rule confirms a nongrantor trust is not a pass-through, so a completed-gift nongrantor trust's own sale is outside the excise. The carve-out: a WA-resident beneficiary is taxed on capital gains actually distributed and allocated to that individual. Verbatim quote verified against app.leg.wa.gov WAC 458-20-301.

Washington general anti-avoidance statute does not reach the capital gains excise (ch. 82.87)

“This section applies only to the following transactions or arrangements:”

Note: RCW 82.32.655(3) enumerates the ONLY transactions the general anti-avoidance rule reaches: (a) construction joint ventures, (b) disguised income under chapter 82.04 (B&O), and (c) disguised purchase/use under chapters 82.08/82.12 (sales/use). Chapter 82.87 (the capital gains excise) is not listed, so DOR's codified economic-substance authority does not reach a nongrantor-trust structure. Residual risk is untested common-law sham/step-transaction only. Verbatim quote verified against app.leg.wa.gov RCW 82.32.655.

Washington: a grantor trust's gain is attributed to the individual grantor (within the excise)

“An individual is considered to be a beneficial owner of long-term capital assets held by an entity that is a pass-through or disregarded entity for federal tax purposes, such as a partnership, limited liability company, S corporation, or grantor trust, to the extent of the individual's ownership interest in the entity as reported for federal income tax purposes.”

Note: A grantor trust is a federal pass-through, so its long-term capital gain flows through to the individual grantor (a natural person) and is taxed by the excise. Verbatim quote verified against app.leg.wa.gov RCW 82.87.040 (as amended, 2025 c 421 s 101).

Washington: an incomplete-gift nongrantor trust (ING) is deemed a grantor trust, gain taxed to grantor

“A nongrantor trust is deemed to be a grantor trust if the trust does not qualify as a grantor trust for federal tax purposes, and the grantor's transfer of assets to the trust is treated as an incomplete gift under Title 26 U.S.C. Sec. 2511 of the internal revenue code and its accompanying regulations.”

Note: The sole in-chapter anti-avoidance rule for nongrantor trusts. It reaches only INCOMPLETE-gift trusts (ING/DING/NING), which are deemed grantor trusts so their gain is taxed to the WA grantor. A COMPLETED-gift nongrantor trust satisfies neither prong (it is not a federal grantor trust and the gift is complete), so it is not caught. Verbatim quote verified against app.leg.wa.gov RCW 82.87.040.

WAC 458-20-301: a nongrantor trust is not a pass-through; beneficiaries taxed only on distributions

“The department does not consider estates, or trusts other than grantor trusts, to be pass-through entities. However, beneficiaries of estates and nongrantor trusts may nevertheless be subject to capital gains excise tax on distributions of capital gains received from estates and nongrantor trusts.”

Note: DOR's own rule confirms a nongrantor trust is not a pass-through, so a completed-gift nongrantor trust's own sale is outside the excise. The carve-out: a WA-resident beneficiary is taxed on capital gains actually distributed and allocated to that individual. Verbatim quote verified against app.leg.wa.gov WAC 458-20-301.

Washington is a community property state: property acquired during marriage is community property (RCW 26.16.030)

“Property not acquired or owned, as prescribed in RCW 26.16.010 and 26.16.020, acquired after marriage by either husband or wife or both, is community property.”

Note: Washington is a community property state. RCW 26.16.030 is the primary statute. Washington has no state income tax on wages/ordinary income; but the CG excise (RCW 82.87) applies to long-term capital gains. Community property classification affects federal filing and the CG excise base (each spouse reports their one-half share). Registered domestic partners have community property rights under RCW 26.60.