Washington does not have an individual income tax on wages or salaries, but does impose a capital gains excise tax with a 7 percent rate on long-term capital gains above approximately $262,000 and a 9.9 percent rate on gains above $1 million. (Lawmakers recently enacted a 9.9 percent tax on household income above $1 million, which goes into effect in 2028.) Washington does not have a traditional corporate income tax but does impose a gross receipts tax (Business and Occupation Tax). Washington has a 6.50 percent state sales tax rate and an average combined state and local sales tax rate of 9.51 percent. Washington has a 0.75 percent effective property tax rate on owner-occupied housing value. Washington has an estate tax. Washington’s gas tax is 59.04 cents per gallon, and its cigarette excise tax is $3.025 per pack of 20 cigarettes.
Washington raises tax revenue primarily through general sales taxes (37.6 percent of total state and local tax revenue), other taxes (35.0 percent), and property taxes (26.0 percent). Washington collects $7,745 in state and local tax collections per capita, carries $10,997 in state and local debt per capita, and has a 103 percent funded ratio of public pension plans. Washington’s tax system ranks 45th overall on the 2026 State Tax Competitiveness Index.
Each state’s tax code is a multifaceted system with many moving parts, and Washington is no exception. Use the tabs below to compare Washington taxes with other states and to see how Washington raises tax revenue. You can also browse our tax maps, which are compiled from our annual publication, Facts & Figures 2026: How Does Your State Compare?
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The State Tax Competitiveness Index enables policymakers, taxpayers, and business leaders to gauge how their states’ tax systems compare. While there are many ways to show how much state governments collect in taxes, the Index evaluates how well states structure their tax systems and provides a road map for improvement.
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Facts & Figures serves as a one-stop state tax data resource that compares all 50 states on over 40 measures of tax rates, collections, burdens, and more.
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Individual income taxes are a major source of state government revenue, accounting for more than a third of state tax collections. How do income taxes compare in your state?
9 min read
Retail sales taxes are an essential part of most states’ revenue toolkits, responsible for nearly a quarter of combined state and local tax collections.
18 min read
Forty-four states levy a corporate income tax, with top rates ranging from a 2 percent flat rate in North Carolina to an 11.5 percent top marginal rate in New Jersey. Four states—Georgia, Nebraska, North Carolina, and Pennsylvania—reduced their corporate income tax rates effective January 1, 2026.
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Property taxes are the primary tool for financing local governments. While no taxpayers in high-tax jurisdictions will be celebrating their yearly payments, property taxes are largely rooted in the benefit principle of taxation: the people paying the property tax bills are most often the ones benefiting from the services.
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The latest IRS and Census data show that people and businesses favor states with low and structurally sound tax systems, which can impact the state’s economic growth and governmental coffers.
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Whether tax savings motivated his move or not, the implications for Washington are very real, and serve to illustrate just how dangerous it can be to design tax systems that rely so overwhelmingly on a very small number of taxpayers choosing to stay put.
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To alleviate the regressive impact on wireless consumers, states should examine their existing communications tax structures and consider policies that transition their tax systems away from narrowly based wireless taxes and toward broad-based tax sources.
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Short FormWhat do The Rolling Stones, NFL star Tyreek Hill, and Maryland millionaires have in common? They all moved because of taxes.
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In recognition of the fact that there are better and worse ways to raise revenue, our Index focuses on how state tax revenue is raised, not how much. The rankings, therefore, reflect how well states structure their tax systems.
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In addition to the federal estate tax, with a top rate of 40 percent, some states levy an additional estate or inheritance tax.
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The differences in purchasing power can be large and they have significant implications for the relative impact of economic and tax policies across the United States.
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The state EV taxation landscape reflects the evolving transportation sector and the pressing need to address both fiscal gaps in road funding and environmental concerns.
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Any move to repeal the cap or enhance the deduction would disproportionately benefit higher earners, making the tax code more regressive.
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Property taxes are the primary tool for financing local governments and generate a significant share of state and local revenues.
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