Washington state income tax
Washington has no state individual income tax on wages, self-employment income, or retirement withdrawals. It does, however, tax certain capital gains (see below). The state otherwise funds itself through sales tax and property tax.
Does Washington have a state income tax?
No. Washington is one of the states with no individual income tax, so there is no state tax on your wages or salary. Washington has no individual income tax on wages, salaries, or other earned income, and no corporate net income tax. The Washington Supreme Court held in Culliton v. Chase, 174 Wash. 363 (1933), that a graduated income tax violates Article VII, Section 1 of the state constitution (income is 'property,' which must be taxed uniformly), and no constitutional amendment has since been adopted to permit one. Washington instead relies on sales tax, the B&O gross-receipts tax on businesses, property tax, and (since 2022) a separate excise tax on long-term capital gains
| Item | Washington |
|---|---|
| State income tax | None |
| Capital gains tax | Taxed, up to 9.9% (see below) |
| State sales tax | 6.5% (plus local) |
| Avg. property tax rate | 0.75% of home value |
| Estate / inheritance tax | Estate tax (exemption $3,000,000) |
How does Washington tax capital gains?
Washington taxes capital gains under special rules rather than at the ordinary income rate. Washington's capital gains excise tax (RCW 82.87) taxes long-term capital gains at 7% on the first $1,000,000 of Washington gain after an annual standard deduction ($250,000 base amount under RCW 82.87.060, indexed for inflation; $278,000 for calendar year 2025 per DOR, the indexed 2026 figure had not yet been published by DOR as of this writing). Beginning with tax year 2025 returns (due April 15, 2026) and continuing in 2026, ESSB 5813 (2025) added a second tier: gain exceeding $1,000,000 after the deduction is taxed at 7% plus an additional 2.9% surtax, a combined marginal rate of 9.9% on that excess. Excluded from the tax entirely: real estate, retirement-account transactions, most tangible personal property, timber/timberland, agricultural land and livestock, and qualifying small-business and qualified-family-owned-business-interest sales (RCW 82.87.050, .070). The tax applies only to individuals, including via pass-through entities. You still owe federal capital gains tax on top of any state tax. See how capital gains tax works in 2026.
What about retirement income in Washington?
Because Washington has no income tax, Social Security, pensions, and 401(k)/IRA withdrawals are all untaxed at the state level. See Washington retirement taxes for the full picture.
Sources
- Washington income tax: Washington Department of Revenue / Taxation.
- Washington capital gains treatment: Washington tax authority.
- Washington sales tax: Washington Department of Revenue.