EVERETT, FEB. 19: Local business and economic leaders released statements expressing disapproval of Senate Bill 6346, which could establish a new state income tax on annual income over $1 million.
SB 6346 passed the Washington Senate on Monday and would impose a 9.9% personal income tax on income above $1 million beginning in 2028, with first tax filings expected in 2029 if the bill becomes law.
The proposal now heads to the House of Representatives for further consideration. If approved, it would then be sent to the governor’s desk.
Proponents describe it as a “Millionaires’ Tax” aimed at generating revenue for education and health care while providing targeted tax relief to low- and middle-income families and certain small businesses.
“Today was a momentous step forward for Washington’s 1.1 million school kids, people struggling to afford health care, and small businesses looking for help, that help is on the way,” Senate Majority Leader Jamie Pedersen (D-Seattle) said Monday.
The new tax would generate approximately $3.7 billion annually and would affect fewer than 1% of the state’s wealthiest households, according to Senate Democrats.
In addition, the proposal would expand the state’s Working Families Tax Credit and eliminate the sales tax on hygiene products. It would also put 7% of revenue towards public defense services.
Gov. Bob Ferguson said Tuesday that he supports a millionaire income tax but won’t sign the measure unless it reallocates enough money back to small businesses and low-income families.
Washington is one of only nine states in the U.S. without an income tax.
Local chambers and business leaders in the Greater Everett area expressed concerns for businesses and future economic growth.
Ray Stephanson, President & CEO of Economic Alliance of Snohomish County said, “EASC continues to believe that any fundamental restructuring of Washington’s tax system must be carefully evaluated for its economic impacts. While the Senate has advanced this proposal, significant concerns remain about how this policy could affect businesses, particularly those operating as pass-through entities, and the broader regional economy.”
A pass-through entity is a business structure not subject to corporate income tax because it passes profits onto the owner.
EASC cited key concerns including stacked taxation risks, seasonal projects, and administrative and compliance burdens.
Critics argue that the bill could drive the wealthy and businesses to lower-tax states, reducing the overall tax base.
The Greater Everett Chamber of Commerce released a statement opposing the bill, calling for “productive dialogue on building fair tax structures that support working families while promoting long-term growth and competitiveness.”
“Washington needs an honest conversation about affordability and competitiveness,” Wendy Poischbeg, CEO of the Everett Chamber said. “But SB 6346 is not tax reform. It is a major new tax with insufficient protections, unclear treatment of real estate, and no meaningful commitment to offsetting relief for the families and small businesses who ultimately bear the cost of policy decisions made in Olympia.”
Craig Skotdal, co-owner of Skotdal Real Estate, which operates retail, office, and multifamily units in the downtown Everett core, said the bill would negatively affect future development.
In a letter forwarded to Everett Post, Skotdal urged key supporters to consider multifamily housing investments, a key growth factor for the City of Everett.
“If enacted, SB 6346 will reduce housing starts in places like Downtown Everett, tightening supply and worsening affordability over time. It will also reduce local property tax and sales tax growth and eliminate construction jobs and small-business activity that accompany new projects,” Skotdal wrote.
Lawmakers are expected to continue debating the bill through the end of session, scheduled for Thursday, March 12.
Disclaimer: North Sound Media, the parent company of The Everett Post, is owned by the Skotdal family. In the interest of transparency, we disclose this relationship and remain committed to fair, independent, and unbiased reporting on the Greater Everett area.
