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OLYMPIA, WA – Washington state’s proposed “Millionaire Tax,” officially known as SB 6346, is moving forward in the legislative process, having passed the state Senate on February 16th by a vote of 27-22. The bill, which aims to impose a tax on high earners, is now scheduled for a public hearing before the House Finance Committee on Tuesday, February 24th, at 8 a.m. The debate surrounding the tax highlights deep divisions among lawmakers and has sparked significant concern from the business community.
The legislation has drawn considerable opposition, with 61,625 individuals having already registered their position on the bill, with 56,608 (92%) opposed, 4,883 in favor and 134 registering as neutral, according to data from the Washington State Legislature. The National Federation of Independent Business (NFIB) is leading the charge against the tax, raising concerns about its potential impact on small businesses, particularly those structured as pass-through entities.
Concerns Over Pass-Through Entity Treatment
A key point of contention revolves around how the tax will treat pass-through entities – businesses where profits are passed through directly to the owners and reported on their individual income tax returns. The governor’s office has engaged with the NFIB to discuss these concerns, with the governor’s team suggesting that firms with revenue below $7 million likely wouldn’t be affected, as their net earnings would remain under $1 million annually after deductions for Adjusted Gross Income (AGI). However, the NFIB remains wary, seeking clarification on how business earnings and expenses will be calculated for federal income tax purposes. Members interested in participating in a video conference with the governor’s staff to discuss these issues can contact NFIB State Director Patrick Connor at [email protected].
Legislative Action and Opposition
The Senate vote on February 16th saw three Democrats – Senators Cortes, Hansen, and Krishnadasan – join all Republican senators in opposing the measure. The NFIB has been actively lobbying against the bill, arguing that it could lead to job losses and hinder economic growth. The organization recently held a “Small Business Day” at the Capitol on February 18th, where members discussed the potential ramifications of the tax with key legislators, including House Finance Committee Chair Rep. April Berg and Senate Ways & Means Committee vice chair for revenue Sen. Noel Frame. Both Berg and Frame reportedly expressed a willingness to continue discussions with the NFIB as the bill progresses.
Upcoming Hearings and Opportunities for Input
Beyond the House Finance Committee hearing on the “Millionaire Tax,” several other bills are scheduled for consideration this week. On Monday, February 23rd, the Senate Labor & Commerce Committee will hear HB 2405, concerning L&I PTSD treatment for first responders and nurses, and HB 2479, related to wage recovery funds for victims of wage theft. On Thursday, February 26th, the Senate Ways & Means Committee will consider HB 2442, which the NFIB opposes due to its potential expansion of local government taxing authority. Members are encouraged to sign in to support or oppose these bills as appropriate. You can sign in here.
Legislators in 21 districts are also hosting town hall meetings this weekend, providing an opportunity for constituents to voice their concerns directly. A list of town hall events can be found here and here. Senator Vandana Slatter (48th District) will also be hosting a “coffee chat” on Saturday, February 21st, at Soulfood Coffee in Redmond.
As the “Millionaire Tax” moves through the House, the debate is expected to intensify. The outcome of the House Finance Committee hearing on Tuesday will be a crucial indicator of the bill’s future. The NFIB continues to mobilize opposition, urging members to engage with lawmakers and share their concerns about the potential impact on Washington’s small businesses.
What are your thoughts on the proposed tax? Share your comments below and let us know how this legislation could affect you.
