Washington HB 1665: Repealing the capital gains income tax.

Bill Text

AN  ACT  Relating  to  repealing  the  capital  gains  income  tax; 1
creating   a   new   section;   repealing   RCW 82.87.010, 82.87.020, 2
82.87.030, 82.87.040, 82.87.050, 82.87.060, 82.87.070, 82.87.080, 3
82.87.090, 82.87.100, 82.87.110, 82.87.120, 82.87.130, 82.87.140, 4
82.87.150,  and 82.04.4497;  repealing  2021  c  196  ss  18  and  20 5
(uncodified); and providing an effective date.6
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:7
NEW  SECTION.   Sec.  1.   The  legislature  finds  that  the  capital 8
gains   income   tax   incentivizes   the   out-of-state   migration   of 9
individuals  and  families  and  is  responsible  for  reducing  Washington 
10
state's  economic  competitiveness  relative  to  other  states.  To 11
maintain  Washington  as  a  desirable  place  where  individuals  and 12
families  choose  to  reside,  invest,  and  thrive,  the  legislature 13
recognizes  the  need  to  repeal  policies  that  discourage  growth, 14
innovation, and prosperity.15
This  tax  has  disproportionately  affected  economic  activity  and 16
disadvantaged  individuals  and  families  who  lack  the  means  to  avoid 17
its  impact.  These  dynamics  exacerbate  imbalances  in  the  tax  system 18
and place additional burdens on those unable to navigate or mitigate 19
the  tax's  effects.  By  repealing  this  tax,  the  legislature  aims  to 20
create   a   fairer,   more   competitive   economic   environment   that 21
H-0708.3
HOUSE BILL 1665
State of Washington69th Legislature2025 Regular Session
By Representative Dufault
Read first time 01/28/25.  Referred to Committee on Finance.
p. 1HB 1665

encourages  the  retention  and  attraction  of  diverse  talent  and 1
investment.2
Moreover, addressing this tax aligns with the state's commitment 3
to  fostering  opportunity  and  ensuring  that  Washington  remains  an 4
attractive  destination  for  individuals,  families,  and  businesses 5
seeking  to  contribute  to  and  benefit  from  its  robust  economy  and 6
quality of life.7
NEW SECTION.  Sec. 2.  The following acts or parts of acts are 8
each repealed:9
(1) RCW 82.87.010 (Findings
—
Intent
—
2021 c 196) and 2021 c 196 s 10
1;11
(2) RCW 82.87.020 (Definitions) and 2021 c 196 s 4;12
(3) RCW 82.87.030 (Distribution of revenues) and 2021 c 196 s 2;13
(4) RCW 82.87.040 (Tax imposed
—
Long-term capital assets) and 2021 14
c 196 s 5;15
(5) RCW 82.87.050 (Exemptions) and 2021 c 196 s 6;16
(6) RCW 82.87.060 (Deductions) and 2021 c 196 s 7;17
(7) RCW   82.87.070   (Qualified   family-owned   small   business 18
deduction) and 2021 c 196 s 8;19
(8) RCW 82.87.080 (Charitable donation deduction) and 2021 c 196 20
s 9;21
(9) RCW 82.87.090 (Other taxes) and 2021 c 196 s 10;22
(10) RCW  82.87.100  (Allocation  of  long-term  capital  gains  and 23
losses
—
Credit) and 2021 c 196 s 11;24
(11) RCW 82.87.110 (Filing of returns
—
Additional documentation
—
25
Penalty) and 2021 c 196 s 12;26
(12) RCW 82.87.120 (Joint filers
—
Separate filers
—
Tax liability) 27
and 2021 c 196 s 13;28
(13) RCW 82.87.130 (Administration of taxes) and 2021 c 196 s 14;29
(14) RCW 82.87.140 (Tax criminal penalties) and 2021 c 196 s 15;30
(15) RCW 82.87.150 (Annual adjustments) and 2021 c 196 s 17;31
(16) RCW 82.04.4497 (Credit
—
Sale or exchange of long-term capital 32
assets) and 2021 c 196 s 16;33
(17) 2021 c 196 s 18 (uncodified); and34
(18) 2021 c 196 s 20 (uncodified).35
NEW SECTION.  Sec. 3.  This act takes effect October 1, 2025.36
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