(The Center Square) – Washington state lawmakers pulled an all-nighter on the House floor in debating a controversial income tax bill Monday evening into Tuesday morning.
Legislators returned shortly after 7 a.m. after being at ease for a short time on Tuesday to continue debate on dozens of Republican amendments to Senate Bill 6346, a 9.9% tax on adjusted gross income exceeding $1 million.
Republican members are hoping to blunt, to the extent they can, legislation they fear will have a devastating impact to businesses and potentially lead to capital flight of the wealthy.
Assuming it passes, the legislation is expected to generate approximately $3 billion to $3.7 billion annually to fund early learning programs, expand financial aid for low-income households and broaden sales tax exemptions for essential goods.
On Friday, Gov. Bob Ferguson pledged to sign a revised House version of the bill – a striking amendment to the proposal – because it addresses his key demands for increased affordability, tax relief for working families, and reduced burdens on small businesses.
Critics have expressed concerns that the high-earner taxes could eventually be expanded to affect the middle class.
They argue an income tax is unconstitutional because the state constitution defines income as “property,” requiring a uniform tax rate, rather than a graduated one targeting specific income levels.
Republican opponents of the bill repeatedly said on the House floor that the income tax is making Washington a state that is no longer attractive to new business.
“An income on anyone will soon become an income tax on everyone,” said state Rep. Jeremie Dufault, R-Selah, who mentioned the movie “The Blob” from the 1950s suggesting it was “gobbling up everyone in its path.”
As debate began on the bill Monday evening, Republicans pushed to postpone a vote, arguing the monumental tax structure change was too much to vote on in a short session when only a few days remain.
Democrats rejected the attempt.
Among the amendments offered by Republicans was to eliminate sales tax on live demonstrations, put in place during the 2025 legislative session.
“We’re throwing the rug out from people who do pottery classes and gardening classes?” asked Rep. Travis Couture, R-Allyn. “And I always thought the most absurd of the live demonstrations [tax] was to tax kids trying to learn how to drive in driver’s ed. That’s absolutely insane.”
Republicans urged support for other amendments, including one to exempt stock options given to employees.
“It’s wholly unfair to tax someone on a stock that they’re not actually cashing in on, because it may not even have value when they go to do so,” said Rep. Peter Abbarno, R-Centralia.
Several Republicans urged the majority not to pass SB 6346 because of the potential impact on stifling business innovation.
“The people who are thinking about locating … the next Microsoft or the next Amazon are not going to pick here and we’re not going to have those kinds of blessings of having those businesses here,” said Rep. Cyndy Jacobsen, R-Puyallup.
On Monday, The Center Square spoke with Morgan Irwin, government affairs vice president for the Association of Washington Business, who shared her concerns about the income tax bill.
“We did a couple of different surveys at AWB, and in our last quarterly update we asked our members how many are considering moving their domicile, where their taxable address is outside of the state of Washington,” Irwin said. “About 500 employers responded and 44% of the respondents said yes.”
Irwin said the numbers are even higher on the other side of the state.
“If you look at just eastern Washington, the percentage flips with 56% of business owners saying they plan to move their domicile,” she said.
The Senate will need to concur on any additional amendments approved by the House before the bill is sent to the governor for his signature. The last day of the legislative session is Thursday.
Debate on SB 6346 continues Tuesday morning.
This is a developing story.
