2023 Session – General Legislative Recap and Look Ahead: Week of April 10, 2023
2023 Legislative Session Update
Friday, April 7, 2023
Today marks the 89th day of the 2023 Legislative session in Olympia. We are nearing the end of the 2023 105-day Legislative session and our last cutoff is occurring Wednesday, April 12th which is the last day to consider (pass) opposite house bills (5 p.m.). The only exception will be initiatives and alternatives to initiatives, budgets and matters necessary to implement budgets, differences between the houses, and matters incident to the interim and closing of the session.
Lawmakers are currently on the House and Senate Floors and caucus voting on legislation, along with closed door conversations on finalizing the Operating, Capital and Transportation Budgets.
Late last week, the State Supreme Court upheld the new 7% tax on profits from the sale of bonds and stocks above $250,000 as an excise tax and not a tax on income. This came as a result from a capital gains tax that was sponsored by Senator June Robinson which was signed into law by Governor Inslee in 2021. Democratic budget writers had anticipated/hoped for the favorable decision and factored in the $500 million expected annually from the capital gains tax into the new state budgets being written this spring. The new tax dollars are intended to go toward childcare and early-learning programs.
There have been rumblings that Senator Noel Frame’s SB 5486 which didn’t get voted out of committee could be brought to the Senate Floor for a vote, in the waning days of session. This bill would create a 1% tax on financial intangible assets, such as cash, stocks and bonds, over $250 million.
We have 16 days left until the session concludes on Sunday, April 23.
This bill would impose a state level tax on some intangible personal property of Washington residents. The tax is 1 percent multiplied by a resident's taxable worldwide wealth. Taxable worldwide wealth includes the fair market value of all intangible assets, excluding any intangible assets that are exempt from the tax.
Financial intangible assets are subject to the 1 percent tax, and include the following:
- cash and cash equivalents;
- financial instruments such as bonds, stocks, and commodities contracts;
- units of ownership in a subchapter K entity and subchapter S entity; and
- other similar intangible assets.
Assets exempt from the 1 percent intangible personal property tax:
- the first $250 million of a resident's financial intangible assets;
- all nonfinancial intangible assets;
- worldwide wealth of companies;
- debt obligations of the United States, such as United States treasury bonds;
- debt obligations of the state of Washington and local governments, such as municipal bonds;
- stock of federal reserve banks and other corporations created by the United States Congress; and
- any property that is subject to ad valorem property taxation.