Background

The 2021 Washington State Legislature passed ESSB 5096 ( RCW 82.87 ) which created a 7% tax on the sale or exchange of long-term capital assets such as stocks, bonds, business interests, or other investments and tangible assets.

This tax only applies to individuals. However, individuals can be liable for the tax because of their ownership interest in a pass-through or disregarded entity that sells or exchanges long-term capital assets. The tax only applies to gains allocated to Washington state.

The department adjusts the deduction annually for inflation. See yearly table .

The revenue collected from this tax funds the education legacy trust and common school construction accounts.