(The Center Square) – Democratic lawmakers in Washington state are moving closer to repealing a 2025 law that raised the state’s top estate tax rate to 35%, the highest in the nation.
Senate Bill 6347, introduced in early February, has already cleared the full Senate. On Thursday, the legislation received its first hearing in the House Finance Committee.
“This is a very straightforward adjustment to our estate tax,” said bill sponsor Sen. Claudia Kauffman, D-Kent. “Last year, the rate within our schedule was increased and this bill simply restores it back to those rates that were there. The estate tax, of course, will continue to support education through the education legacy trust [fund].
Committee member Rep. Cyndy Jacobsen, R-Puyallup, then pressed Kauffman to explain why she was offering the bill now when the state is facing another budget deficit.
“Yes, we do have such a budget crisis,” Kauffman said. “There are a lot of things I could say about the budget crisis, but in terms of this particular bill, this was a rate increase that was the largest … it took a significant jump, and I believe it impacted the people who live here, and people who would consider moving in order to save those estate taxes.”
The proposal comes as Democrats continue to debate additional tax measures, including a new income tax on individuals earning more than $1 million annually.
Business advocates and other critics argue that recent tax changes may influence investment and lead to wealthier residents relocating out of state.
Some have also suggested that rolling back the higher estate tax is intended to quell big business from speaking out against this session’s proposed income tax.
Most of the testimony during Thursday’s public hearing was in opposition to the bill.
“I ask you to vote against Senate Bill 6347. This bill is a favor to the children of the oligarchs,” said John Burbank. “When the estate tax was raised from 0% to 20% in 2005, there was no capital flight. The only people who will leave the state of Washington now are those intent on disabling our already tattered commonwealth.”
The one person to speak in support of the bill was Tim Overland, CEO of the Nelson Legacy Group, which he described as a 75-year-old real estate business serving Redmond, Kirkland, and Leavenworth.
“Like many multi-generational businesses in Washington, the Nelson Legacy Group is owned by a group of siblings who have dedicated their lives to serving a community,” Overland said. “The siblings are all in their 70s. And earlier this year, one of the five Nelson family owners passed away. And although no estate tax is due now because his spouse survives him, fortunately, the experience has made it clear how vulnerable the business is under the current estate tax structure. We simply do not have the liquidity to cover the estate tax as currently designed.”
The bill is set for executive session in the House Finance Committee at 8 a.m. on Monday.
The income tax bill, Senate Bill 6346, is scheduled for executive session in the same committee at 8 a.m. on Friday.
