How does Washington’s tax code compare? Washington does not have a typical individual income tax but does levy a 7.0 percent tax on capital gains income. Washington does not have a corporate income tax but does levy a state gross receipts tax. Washington has a 6.50 percent state sales tax rate and an average combined state and local sales tax rate of 9.38 percent. Washington has a 0.76 percent effective property tax rate on owner-occupied housing value.
Washington has an estate tax. Washington has a 52.8 cents per gallon gas tax rate and a $3.025 cigarette excise tax rate. The State of Washington collects $6,644 in state and local tax collections per capita. Washington has $11,632 in state and local debt per capita and has a 103 percent funded ratio of public pension plans. Overall, Washington’s tax system ranks 35th on our 2024 State Business Tax Climate Index.
Each state’s tax code is a multifaceted system with many moving parts, and Washington is no exception. The first step towards understanding Washington’s tax code is knowing the basics. How does Washington State collect tax revenue? Click the tabs below to learn more! You can also explore our state tax maps, which are compiled from our annual publication, Facts & Figures 2024: How Does Your State Compare?
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The overall U.S. tax and transfer system is overwhelmingly progressive, and understanding the extent—and source—of that progressivity is essential for lawmakers considering the trade-offs associated with each tax policy decision.
23 min read
The Washington Supreme Court not only gave its blessing to a capital gains tax that runs afoul of the state constitution, but it also set out a welcome mat for legislators eager to implement a broader income tax.
7 min read
As housing prices are rapidly increasing, and property tax bills along with them, the property tax has come into the spotlight in many states. The design of a state’s property tax system can affect how attractive that state is to businesses and residents.
9 min read
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.
2 min read
Gross receipts taxes impose costs on consumers, workers, and shareholders alike. Shifting from these economically damaging taxes can thus be a part of states’ plans for improving their tax codes in an increasingly competitive tax landscape.
4 min read
Individual income taxes are a major source of state government revenue, accounting for more than a third of state tax collections:
9 min read
While many factors influence business location and investment decisions, sales taxes are something within policymakers’ control that can have immediate impacts.
11 min read
At the end of 2022, prices were 14.6 percent higher than they were two years prior. That’s the fastest inflation rate over any two calendar years since the stagflation era of the late 1970s. State policymakers are understandably interested in bringing any tools at their disposal to bear on the problem. And many of them are reaching for tax policy solutions.
7 min read
New Jersey levies the highest top statutory corporate tax rate at 11.5 percent, followed by Minnesota (9.8 percent) and Illinois (9.50 percent). Alaska and Pennsylvania levy top statutory corporate tax rates of 9.40 percent and 8.99 percent, respectively.
6 min read
In a coordinated effort, lawmakers in seven states that collectively house about 60 percent of the nation’s wealth—California, Connecticut, Hawaii, Illinois, Maryland, New York, and Washington—are introducing wealth tax legislation on Thursday.
7 min read