The Washington Department of Revenue has increased its estimate for revenue from the state’s new tax on high earners, projecting $3.1 billion in the initial fiscal year and approximately $8.3 billion for the 2029-31 biennium. The earlier estimates were $2.7 billion and $6.9 billion, respectively.
The 9.9% tax, established by legislation passed in 2026, applies beginning Jan. 1, 2028, to individuals and married couples filing jointly with annual adjusted gross income exceeding $1 million. First tax returns will be due in April 2029.
The Department of Revenue estimates that about 25,000 households could be subject to the tax, up from the 21,000 assumed during the legislative session. The agency attributed the higher projection to improved economic forecasts between November 2025 and June 2026, including increases in projected dividend income, stock income, personal income, and wages. Analysts estimate that about 4,000 households previously near the $1 million threshold could exceed it by the time the tax takes effect.
The updated figures are estimates and have not yet been incorporated into the state’s official revenue forecast. Chief economist Dave Reich said the September forecast will be the first opportunity to evaluate whether the higher figures should be included.
Initiative 645, which will appear on the Nov. 3 statewide ballot, would repeal the tax. If approved, the projected revenue would not be available to the state. The tax could also face a constitutional legal challenge if it remains in effect.
