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2021 Senate Bill 5096: Concerning an excise tax on gains from the sale or exchange of certain capital assets
Introduced by Sen. June Robinson (Everett) (D) on January 11, 2021
Referred to the Senate Ways & Means Committee on January 11, 2021
Substitute offered in the Senate on February 16, 2021
Makes the following changes to the original bill: • Lowers the tax rate from 9 percent to 7 percent. • Increases threshold exclusion to $250,000. • Exempts all sales or exchanges of real estate. • Replaces sole proprietor deduction with a family-owned small business deduction. • Exempts the value of goodwill received when a car dealership is sold. • Deposits the first $350 million in revenues collected each year into the Education Legacy Trust Account and deposits the remainder into a new Taxpayer Relief Account..
Referred to the Senate Rules Committee on February 18, 2021
Amendment offered by Sen. John Braun (Centralia) (R) on March 6, 2021
Prohibits the state attorney general from requesting the court to reconsider its prior rulings declaring income to be property.
The amendment failed by voice vote in the Senate on March 6, 2021
Amendment offered by Sen. John Braun (Centralia) (R) on March 6, 2021
Eliminates the requirement for taxpayers owing the state tax to also file a copy of their federal income tax return.
The amendment failed by voice vote in the Senate on March 6, 2021
Amendment offered by Sen. John Braun (Centralia) (R) on March 6, 2021
Exempts all real estate from capital gains tax.
The amendment failed by voice vote in the Senate on March 6, 2021
Amendment offered by Sen. Sharon Brown (Kennewick) (R) on March 6, 2021
Adds a referendum clause and a new section listing prior resolutions to impose an income tax.
The amendment failed by voice vote in the Senate on March 6, 2021
Amendment offered by Sen. Phil Fortunato (Auburn) (R) on March 6, 2021
Provides a deduction against the capital gains tax for amounts contributed to a nonprofit organization engaged in services for individuals with disabilities.
The amendment failed by voice vote in the Senate on March 6, 2021
Amendment offered by Sen. Phil Fortunato (Auburn) (R) on March 6, 2021
Provides sales and use tax exemptions for clothing and prepared food. Backfills revenue impact to the state general fund by using capital gains tax revenues deposited into the taxpayer fairness account to the extent funds are available in the taxpayer fairness account.
The amendment failed by voice vote in the Senate on March 6, 2021
Amendment offered by Sen. Phil Fortunato (Auburn) (R) on March 6, 2021
Specifies that the state capital gains tax authorized in section 103 of this act shall not be construed in any way as providing authorization for cities or counties to impose a local version of the tax.
The amendment failed by voice vote in the Senate on March 6, 2021
Amendment offered by Sen. Phil Fortunato (Auburn) (R) on March 6, 2021
Makes the capital gains tax voluntary.
The amendment failed by voice vote in the Senate on March 6, 2021
Amendment offered by Sen. Steve Hobbs (Lake Stevens) (D) on March 6, 2021
Removes the emergency clause. Removes language from the intent section specifying that the tax is necessary for the support of state government and its existing institutions..
The amendment passed by voice vote in the Senate on March 6, 2021
Amendment offered by Sen. Marko Liias (Lynnwood) (D) on March 6, 2021
Exempts the sale of a controlling interest in a business entity from capital gains tax for the portion of the sale attributable to real estate if the transaction is also subject to real estate excise tax.
The amendment passed by voice vote in the Senate on March 6, 2021
Amendment offered by Sen. Ann Rivers (Vancouver) (R) on March 6, 2021
Provides a deduction against the capital gains tax for amounts contributed to a nonprofit organization.
The amendment failed 24 to 25 in the Senate on March 6, 2021.
    See Who Voted "Yes" and Who Voted "No".
Amendment offered by Sen. June Robinson (Everett) (D) on March 6, 2021
Striking amendment: 1) Modifies the title; (2) Adds intent language; (3) Eliminates the maximum number of employees a business may have for its sale to qualify for the small business deduction; (4)Increases the qualifying gross income threshold for the small business deduction from $6,000,000 to $10,000,000; (5) Removes the section of the bill that would require ambiguities to be construed in favor of the application of the tax; (6) Removes the section of the bill that would authorize reciprocal tax collection agreements; (7) Modifies the deposit and distribution of tax collections: Deposits the first $350,000,000 collected each fiscal year into the Education Legacy Trust Account, deposits the next $100,000,000 into the general fund, and deposits the remainder into a newly created taxpayer fairness account; (8) Provides annual inflationary adjustments for the $250,000 exclusion amount, $10,000,000 gross income threshold for the small business deduction, and account distribution amounts; and (9) Makes technical corrections and clarifications.
The amendment passed by voice vote in the Senate on March 6, 2021
Amendment offered by Sen. Shelly Short (Addy) (R) on March 6, 2021
Changes the title of the bill to: "enacting a capital gains income tax.".
The amendment failed by voice vote in the Senate on March 6, 2021
Amendment offered by Sen. Shelly Short (Addy) (R) on March 6, 2021
Specifies that applicable Title 26 federal tax code references in the bill are to the federal income tax laws.
The amendment failed by voice vote in the Senate on March 6, 2021
Amendment offered by Sen. Keith Wagoner (Sedro-Woolley) (R) on March 6, 2021
Delays the effective date of the act until July 1, 2025, to allow the Legislature to review recommendations from the Tax Structure Work Group before imposing a state tax on capital gains.
The amendment failed by voice vote in the Senate on March 6, 2021
Amendment offered by Sen. Judy Warnick (Grant) (R) on March 6, 2021
Exempts all sales or exchanges of cattle, horses, and livestock from the capital gains tax.
The amendment failed by voice vote in the Senate on March 6, 2021
Amendment offered by Sen. Lynda Wilson (Clark County) (R) on March 6, 2021
Provides a total tax deduction for any sale or transfer to a family member.
The amendment failed 23 to 26 in the Senate on March 6, 2021.
    See Who Voted "Yes" and Who Voted "No".
Amendment offered by Sen. Lynda Wilson (Clark County) (R) on March 6, 2021
Limits the capital gains tax on tangible personal property to only that property which was located in Washington during the current taxable year.
The amendment failed by voice vote in the Senate on March 6, 2021
Received in the House on March 9, 2021
Referred to the House Finance Committee on March 9, 2021
Amendment offered by Rep. Lisa Callan (King) (D) on April 20, 2021
Reduces the number of years a taxpayer must own the qualified family-owned small business from eight years to five years in order to qualify for the deduction.
The amendment passed by voice vote in the House on April 20, 2021
Amendment offered by Rep. Rob Chase (Liberty Lake) (R) on April 20, 2021
Removes the current distribution of tax revenues to the Education Legacy Trust Account. Deposits all tax revenue into the newly created Taxpayer Fairness Account and provides a mechanism to use the tax proceeds from the Account to provide an annual state sales and use tax rate reduction.
The amendment failed 42 to 54 in the House on April 20, 2021.
    See Who Voted "Yes" and Who Voted "No".
Amendment offered by Rep. Jeremie Dufault (Yakima) (R) on April 20, 2021
Provides an exemption for the value of any long-term capital gain accrued by a capital asset prior to January 1, 2022.
The amendment failed by voice vote in the House on April 20, 2021
Amendment offered by Rep. Jeremie Dufault (Yakima) (R) on April 20, 2021
Defines "real estate" using the property tax definition for "real property" and clarifies that "real estate" includes all buildings, structures, and permanent improvements built upon or affixed to the land.
The amendment failed by voice vote in the House on April 20, 2021
Amendment offered by Rep. Jeremie Dufault (Yakima) (R) on April 20, 2021
Removes the authorization for the Department of Revenue to require the filing of informational returns.
The amendment passed by voice vote in the House on April 20, 2021
Amendment offered by Rep. Jeremie Dufault (Yakima) (R) on April 20, 2021
Clarifies that the reference to the tax being "necessary for the support of the state government and its existing institutions" shall not be interpreted as having the effects of an emergency clause.
The amendment failed by voice vote in the House on April 20, 2021
Amendment offered by Rep. Jeremie Dufault (Yakima) (R) on April 20, 2021
Removes the depositing of the tax proceeds into the Education Legacy Trust Account. Directs all revenues from the tax to be deposited into the Fair Start for Kids Account created in Engrossed Second Substitute Senate Bill No. 5237.
The amendment failed by voice vote in the House on April 20, 2021
Amendment offered by Rep. Ed Orcutt (Kalama) (R) on April 20, 2021
Provides a contingent effective date that is dependent upon the Internal Revenue Service advising the Department of Revenue that the tax imposed under this act is an excise tax.
The amendment failed by voice vote in the House on April 20, 2021
Amendment offered by Rep. Ed Orcutt (Kalama) (R) on April 20, 2021
Removes reference to the tax being necessary for the support of state government and its existing public institutions.
The amendment failed 47 to 51 in the House on April 20, 2021.
    See Who Voted "Yes" and Who Voted "No".
Amendment offered by Rep. Ed Orcutt (Kalama) (R) on April 20, 2021
Requires that 30 percent of the revenues from the tax be deposited into the state budget stabilization account.
The amendment failed by voice vote in the House on April 20, 2021
Amendment offered by Rep. Ed Orcutt (Kalama) (R) on April 20, 2021
Removes the requirement that all revenues from the tax be deposited in the Education Legacy Trust Account.
The amendment failed by voice vote in the House on April 20, 2021
Amendment offered by Rep. Ed Orcutt (Kalama) (R) on April 20, 2021
Allows for the deduction of any capital gain realized for the sale or transfer of a business.
The amendment failed by voice vote in the House on April 20, 2021
Amendment offered by Rep. Ed Orcutt (Kalama) (R) on April 20, 2021
Removes Section 5(2) of the bill that states the tax levied is necessary for the support of state government and its existing institutions. Adds a referendum clause to the bill.
The amendment failed 48 to 50 in the House on April 20, 2021.
    See Who Voted "Yes" and Who Voted "No".
Amendment offered by Rep. Bill Ramos (King) (D) on April 20, 2021
Increases the lookback period to count the five years to determine if the taxpayer meets the material participation requirements for the qualified family-owned small business deduction.
The amendment passed by voice vote in the House on April 20, 2021
Amendment offered by Rep. Drew Stokesbary (Auburn) (R) on April 20, 2021
Removes capital gains invested in federal Opportunity Zones from being added into an individual's Washington adjusted capital gain.
The amendment failed 45 to 53 in the House on April 20, 2021.
    See Who Voted "Yes" and Who Voted "No".
Amendment offered by Rep. Drew Stokesbary (Auburn) (R) on April 20, 2021
Provides the option for a taxpayer to claim a lifetime exemption of $1,000,000 in long-term capital gains.
The amendment failed by voice vote in the House on April 20, 2021
Amendment offered by Rep. Brandon Vick (Camas) (R) on April 20, 2021
Provides a credit against taxes due on any capital gains for charitable contributions made and claimed by an individual on the individual's federal tax return.
The amendment failed by voice vote in the House on April 20, 2021
Amendment offered by Rep. Brandon Vick (Camas) (R) on April 20, 2021
Provides a deduction in computing the tax owed on a capital gain equal to an individual's contributions to a charitable organization claimed on the individual's federal return for that tax year.
The amendment failed 44 to 54 in the House on April 20, 2021.
    See Who Voted "Yes" and Who Voted "No".
Amendment offered by Rep. Brandon Vick (Camas) (R) on April 20, 2021
Provides a credit against taxes due on any capital gains for charitable contributions made and claimed by an individual on the individual's federal tax return. Authorizes an unused credit to be available for two subsequent tax years.
The amendment failed 44 to 54 in the House on April 20, 2021.
    See Who Voted "Yes" and Who Voted "No".
Amendment offered by Rep. Jesse Young (Gig Harbor) (R) on April 20, 2021
Increases the standard deduction for joint filers to $500,000.
The amendment failed 45 to 53 in the House on April 20, 2021.
    See Who Voted "Yes" and Who Voted "No".
Moved to reconsider in the House on April 21, 2021
The vote on the passage of the bill.
The motion passed by voice vote in the House on April 21, 2021
Received in the House on April 21, 2021
Beginning January 1, 2022, an annual state net CGT is imposed on the sale or other voluntary exchange of long-term capital assets by individuals. The tax rate is 7.0 percent. Generally, the tax rate is applied to the capital gains amount reported on the individual's federal income tax return.
Received in the House on April 24, 2021
Received in the Senate on April 24, 2021
Signed by Gov. Jay Inslee on May 4, 2021

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