Washington State Senate Passes Capital Gains Tax Bill 25-24
Now it's off to the Washington state House of Representatives, where it surely will pass and then make its way to the governor, as state Senate Bill 5096, a capital gains tax bill, passed the state Senate by a single 'yea' vote Saturday night and is next headed to the state House.
In a stunning turn of events over the weekend, a state Senate floor vote featured a single extra 'yea' vote that produced a razor thin 25-24 victory. No republicans voted for the measure and three democrats dissented as well, as lawmakers have been mulling the idea of enacting this tax for about six years. Conventional wisdom always was an easy pass in the House, but it was rarely brought up in the Senate fearing it would be easily dismissed. That was then, this is now.
The version that passed over the weekend would apply, if enacted, a 7% tax on the sale of stocks and bonds, personal property and businesses, but only if those profits exceed $250,000 annually.
It would NOT apply to the sale of a home, commercial real estate, retirement accounts, livestock and other properties.
The sale of a family-owned small business that makes less than $10 million a year would be exempt, as well as some real estate sales if the sale is also subject to a real estate excise tax, which passed the Legislature two years ago.
Saturday’s four hour debate was filled with many of the arguments that have been brought up before: Democrats say it affects only a small number of very wealthy people and the tax really doesn't overall amount to that much, Republicans counter that it's nothing more than an income tax, the voters have consistently said they don't want it, and simply, it's unconstitutional.
Senate Bill 5096 passed the state Senate, 25-24.
Passage in the Senate first is a huge step toward the proposal becoming law. In the past, House Democrats have said they had the votes to pass it but didn’t want to send it to the Senate, where it would almost certainly fail.