Millionaires tax in Washington prompts concern among business owners

Washington recently enacted a state income measure that imposes a 9.9% tax on household income above $1 million, effective Jan. 1, 2028, with first payments due April 2029. Business owners and commentators told media they fear the measure could drive activity out of the state and that future tax changes might affect smaller businesses.

Washington state has passed a new income measure commonly called the "millionaires tax," which Gov. Bob Ferguson signed in late March. The law applies a 9.9% tax to household income above $1 million. It is scheduled to take effect on January 1, 2028, with the first payments due in April 2029. Business owners and commentators have told media they worry the law will push economic activity out of the state and that future tax changes could reach smaller businesses. Key points: - The legislature approved the measure and Gov. Bob Ferguson signed it; the tax applies at a 9.9% rate to annual household income above $1 million and is set to begin Jan. 1, 2028, with first payments due April 2029. - Multiple small business owners and local commentators told reporters they fear economic consequences and expressed concern the tax base could be broadened over time. - The governor's office said revenue from the measure will fund items such as free K–12 meals, a large small-business tax break, elimination of sales tax on diapers, and direct payments to nearly 500,000 working families, and local officials have discussed additional revenue options. Summary: Business owners report apprehension about potential economic effects and the possibility of future tax changes, while state officials describe specific public programs that the revenue will support. The law's implementation timeline is known: it takes effect Jan. 1, 2028, with initial payments due April 2029.