Washington Capital Gains Tax

[Snaggletooth]

I have been advised on another forum that Washington State has enacted a capital gains tax. I'm not responding on that board because any response will be scrutinized for any possible, even remote, reference to a political position.

Washington has long been known for not having a state income tax, but for creating absurd alternate ways to tax its citizens. Buying a car tag, for example, could cost $500 or more.

Have they broken the "glass ceiling"? Is this their way of finally letting an income tax into their revenue? I'm sure there are those in their state legislature who have been pushing for an income tax for years and years. The new tax applies to citizens who sell property, and also to out-of-state residents who sell property owned in Washington. I don't know whether their will be a state withholding tax on 1099-S transactions or not. Without withholding, it would be difficult to collect from out-of-state residents who sell.

[Lion]

https://www.seattletimes.com/seattle-news/politics/first-lawsuit-filed-against-capital-gains-tax-passed-by-washington-lawmakers/

[Rapid Robert]

Washington has long been known for not having a state income tax, but for creating absurd alternate ways to tax its citizens. Buying a car tag, for example, could cost $500 or more.
Have they broken the "glass ceiling"? Is this their way of finally letting an income tax into their revenue?

Doesn't every state without a state income tax have other ways to make up for it?

Not sure what your real question or comment is, but you are mis-using the term "glass ceiling". "A glass ceiling is a metaphor used to represent an invisible barrier that prevents a given demographic (typically applied to women) from rising beyond a certain level in a hierarchy." .[Wikipedia]

[Snaggletooth]

Thanks Lion - sounds like you have a relevant link, but the verbage is obscured by an invitation to start an account with the Seattle Times (and be forever inundated by spam from them).
Robert, I wish you would use your raw intelligence to contribute some informative and relevant discussion, instead of lurking in the corner and attacking everyone's post.

[Rapid Robert]

Robert, I wish you would use your raw intelligence to contribute some informative and relevant discussion, instead of lurking in the corner and attacking everyone's post.

It's telling that you equate pointing out a mistake to an "attack". Your question "have they broken the glass ceiling" makes no sense in the context of taxes.

Speaking of "informative and relevant discussion", still wondering what your real question or comment is. Jurisdictions make changes to their systems of taxation all the time, isn't that the reason why most tax preparers have a job? Maybe a new tax in Washington state that will be contested is a current news item for residents of that state, but is there some broader observation you wish to make? Our sponsor, TheTaxBook, does not track state-level tax law changes in their regular Tax Industry News updates. If you just want to make a general rant about new taxes, then please do so.

[Snaggletooth]

There is more information coming from another forum. Apparently they are trying their best not to make it look like an income tax. From a source in Oregon:


The bill is full of exemptions from special interest lobbyist including: real estate, auto dealerships (goodwill), timber, agriculture and other "small business".
There is a $250,000 general exemption.
Sounds like the main target will be sales of stock, bonds,...etc.
I have a few Washington clients that were former Oregon residents, most likely they will not feel the 7% sting.

[Burke]

The new tax applies to citizens who sell property, and also to out-of-state residents who sell property owned in Washington. I don't know whether their will be a state withholding tax on 1099-S transactions or not. Without withholding, it would be difficult to collect from out-of-state residents who sell.

Most states get around this issue of non-residents' sales by withholding a flat amount at closing -- unless the TP can present documentation that he/she will qualify for 121 exclusion; or if they can produce calculations showing what the net gain will be after expenses & basis -- as withholding is usually based on gross sale price. Withholding ensures a state tax return will be provided to reconcile.

[Rapid Robert]

Here is another innovative thing Washington State is doing - an employee-paid payroll tax for minimum long term care insurance.

https://www.mondaq.com/unitedstates/employee-benefits-compensation/1062508/washington-state-payroll-tax-funds-long-term-care-trust-fund-except-for-those-who-choose-a-better-way

"In sum, many middle class seniors are not in a position to fund their assisted living needs, much less their long-term health care if and when it is needed, at least not without impoverishing themselves to qualify for Medicaid. We applaud the creativity of Washington's elected officials in creating a program that will help seniors address these issues.¹³ But we do want to ensure that individuals know that they can opt out of the state program by acquiring their own insurance and that such private insurance often will provide them more bang for their buck, especially if they are higher earners. Further, we encourage Washington State employers to consider group plans as part of their suite of benefit offerings for employees, even if they pass on the premium cost to their employees. However, it may prove challenging for employees and employers to obtain policies given the November 1 deadline adopted under the final version of the legislation."