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Bill

SB 6248

Modifying the capital gains tax under chapter 82.87 RCW and related statutes by closing loopholes, repealing and replacing the business and occupation tax credit with a capital gains tax credit, clarifying ambiguities and making technical corrections in a manner that is not estimated to affect state or local tax collections, treating spouses and domestic partners more consistently, modifying and adding definitions, creating a good faith penalty waiver, and modifying the publication schedule for inflation adjustments.

2023-2024 Regular Session Introduced by Joe Nguyen and 4 co-sponsors

Washington bill closes capital gains tax loopholes and replaces B&O credit with capital gains credit while treating spouses equally, maintaining revenue neutrality through technical adjustments.

First reading, referred to Ways & Means.
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WeVote Research Nonpartisan
Bill Summary · SB 6248

Legislative bill overview

SB 6248 modifies Washington's capital gains tax (enacted in 2021) by closing perceived loopholes, replacing a business and occupation tax credit with a capital gains tax credit, and making technical clarifications. The bill also extends consistent tax treatment to spouses and domestic partners while adjusting the inflation adjustment publication schedule. These changes are designed to be revenue-neutral overall.

Why is this important

Washington's capital gains tax has faced legal challenges and implementation questions since its passage. This bill addresses technical ambiguities and equity issues that affect how the tax applies to different taxpayers and business structures. The revenue-neutral framing suggests policymakers are trying to improve the tax's design rather than expand its reach, though actual fiscal impacts depend on specific loophole closures.

Potential points of contention

  • Definition of "loopholes": Business groups may argue these are legitimate tax planning strategies, while supporters view them as unintended advantages that undermine the tax's intended progressivity
  • B&O tax credit replacement: Eliminating the business and occupation tax credit affects how small businesses and certain industries are taxed relative to capital gains earners
  • Revenue neutrality claims: Whether proposed loophole closures truly offset the capital gains tax credit is likely disputed between fiscal estimators and interest groups
  • Spousal/domestic partner consistency: While framed as equity, changes to filing status treatment could benefit or burden specific household types depending on implementation details

Compiled from official sources — confirm details with the bill’s official record.

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