Capital gains tax repeal

AN ACT Relating to repealing the capital gains income tax; 1
creating a new section; repealing RCW 82.87.010, 82.87.020, 2
82.87.030, 82.87.040, 82.87.050, 82.87.060, 82.87.070, 82.87.080, 3
82.87.090, 82.87.100, 82.87.110, 82.87.120, 82.87.130, 82.87.140, 4
82.87.150, and 82.04.4497; repealing 2021 c 196 ss 18 and 20 5
(uncodified); and providing an effective date. 6
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:7
NEW SECTION. Sec. 1. The legislature finds that the capital 8
gains income tax incentivizes the out-of-state migration of 9
individuals and families and is responsible for reducing Washington 10
state's economic competitiveness relative to other states. To 11
maintain Washington as a desirable place where individuals and 12
families choose to reside, invest, and thrive, the legislature 13
recognizes the need to repeal policies that discourage growth, 14
innovation, and prosperity.15
This tax has disproportionately affected economic activity and 16
disadvantaged individuals and families who lack the means to avoid 17
its impact. These dynamics exacerbate imbalances in the tax system 18
and place additional burdens on those unable to navigate or mitigate 19
the tax's effects. By repealing this tax, the legislature aims to 20
create a fairer, more competitive economic environment that 21
H-0708.3
HOUSE BILL 1665
State of Washington 69th Legislature 2025 Regular Session
By Representative Dufault
Read first time 01/28/25. Referred to Committee on Finance.
p. 1 HB 1665
encourages the retention and attraction of diverse talent and 1
investment. 2
Moreover, addressing this tax aligns with the state's commitment 3
to fostering opportunity and ensuring that Washington remains an 4
attractive destination for individuals, families, and businesses 5
seeking to contribute to and benefit from its robust economy and 6
quality of life. 7
NEW SECTION. Sec. 2. The following acts or parts of acts are 8
each repealed:9
(1) RCW 82.87.010 (Findings— Intent— 2021 c 196) and 2021 c 196 s 10
1; 11
(2) RCW 82.87.020 (Definitions) and 2021 c 196 s 4;12
(3) RCW 82.87.030 (Distribution of revenues) and 2021 c 196 s 2;13
(4) RCW 82.87.040 (Tax imposed— Long-term capital assets) and 2021 14
c 196 s 5; 15
(5) RCW 82.87.050 (Exemptions) and 2021 c 196 s 6;16
(6) RCW 82.87.060 (Deductions) and 2021 c 196 s 7;17
(7) RCW 82.87.070 (Qualified family-owned small business 18
deduction) and 2021 c 196 s 8; 19
(8) RCW 82.87.080 (Charitable donation deduction) and 2021 c 196 20
s 9; 21
(9) RCW 82.87.090 (Other taxes) and 2021 c 196 s 10;22
(10) RCW 82.87.100 (Allocation of long-term capital gains and 23
losses— Credit) and 2021 c 196 s 11; 24
(11) RCW 82.87.110 (Filing of returns — Additional documentation — 25
Penalty) and 2021 c 196 s 12; 26
(12) RCW 82.87.120 (Joint filers — Separate filers — Tax liability) 27
and 2021 c 196 s 13; 28
(13) RCW 82.87.130 (Administration of taxes) and 2021 c 196 s 14;29
(14) RCW 82.87.140 (Tax criminal penalties) and 2021 c 196 s 15;30
(15) RCW 82.87.150 (Annual adjustments) and 2021 c 196 s 17;31
(16) RCW 82.04.4497 (Credit— Sale or exchange of long-term capital 32
assets) and 2021 c 196 s 16; 33
(17) 2021 c 196 s 18 (uncodified); and 34
(18) 2021 c 196 s 20 (uncodified). 35
NEW SECTION. Sec. 3. This act takes effect October 1, 2025.36
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p. 2 HB 1665