Individual taxpayers, however, are deemed to be taxable on the sale of property held 'beneficially' through pass-through and disregarded entities, as understood for federal income tax purposes, or through certain trust arrangements, to the extent of their ownership interest in the entity or trust. But only individuals domiciled in Washington are subject to tax on the sale of intangible investments. Notwithstanding the intent to impose greater taxes on the state's 'wealthiest residents,' nonresidents of Washington are also subject to the tax if they sell tangible personal property located in Washington at the time of sale. Taxpayers are individual persons only, not entities. The amount of tax is based on what taxpayers report as their net long-term capital gain for federal income tax purposes, with adjustments. The tax does not apply to legal entities themselves, and the bill is structured to try to avoid taxing gains on the sale of assets that are physically located outside Washington. State estimates for who will pay the tax are under one-quarter of 1 percent of the population.

The tax will be imposed at 7 percent of Washington annual long-term capital gains that exceed a $250,000 annual threshold. An appeal is pending in the Washington Supreme Court.) (The latter tax was invalidated by a trial court as an unlawful discrimination against interstate commerce. The bill is part of a multi-year push by the legislature to 'rebalance' a state tax system that it calls 'the most regressive in the nation' in Section 1 of the bill 'by increasing taxes on the wealthiest residents.' Previously in 2019, the legislature enacted a new set of graduated tax rates for the real estate excise tax on transfers of real estate as well as a new, extraordinary rate of business and occupation (B&O) tax on the largest multistate financial institutions. The new law will take effect January 1, 2022. 5096), which was signed by Governor Inslee on May 4, 2021. Washington's legislature passed a new capital gains tax in April (Engrossed Substitute S.B.

New wash